A retreat from global trade will hurt India's geopolitical stature

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 A retreat from global trade will hurt India's geopolitical stature

Read more on - Polity | Economy | Schemes | S&T | Environment


  • Economic conditions, policies and India’s geopolitical standing:  According to some recent estimates India can return to 2019-20 GDP levels only by 2025. Such slow growth will have a negative impact on India’s geopolitical standing. Any move towards protectionist policies will further deteriorate international relations. 
  • Trade restrictions will weaken growth: India of the 60s, 70s, and 80s was characterized by import and foreign exchange restrictions, high taxes, and feeble status in world politics. If India has learnt from its past, it must avoid any policy choices that could take it back to political and economic uncertainties of the time.
  • Self-reliance vs. self-sufficiency: India has imposed customs duties on Chinese imports, banned Chinese apps, and initiated efforts to make supply chains more local, in a bd to turn self-reliant. Such measures should not translate to protection of domestic firms from global imports in the long term to achieve self-sufficiency. 
  • Path to self-reliance: India needs to increase per-capita income and boost growth to become self-reliant, not isolate itself from the world by producing only on its own.  
  • International trade and international relations: Diversification of the sources of imports to decrease reliance on China or West Asia and establishing common ground with nations with similar or complementary interests should be the way forward. 
  • Geo-politics: India is a prominent power in Asia and in the Quad-play against China in Indo-Pacific. However, it has its limitations as an adversary of China. Any decrease in its importance for strategic interests of the US and east Asian countries will increase the reluctance of these countries to support India’s position in international affairs.
  • US elections: There are speculations that if Joe Biden government comes to power, US may adopt a more favourable stance towards China in comparison to that of the Republicans currently. Irrespective of who is in power, not being sensitive to the interests of the US, may not bode well for India’s interests.
  • Summary: Economic growth and policy choices will impact India’s geo-political status. Government must do all it can to accelerate economic recovery. Protectionist trade policies will make growth harder. Diversification of sources of imports to decrease over-reliance on certain countries should be the way forward, not shutting the world out.
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                                                                                                                                                        PT's IAS Academy: A retreat from global trade will hurt India's geopolitical stature
                                                                                                                                                        A retreat from global trade will hurt India's geopolitical stature
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