What are the challenges before the Indian economy when the world is moving away from free trade and multilateralism to protectionism and bilateralism? How can these challenges be met?
The global shift towards protectionism presents significant challenges for India. These include reduced market access for Indian exports due to higher tariffs, disruptions in vital global supply chains, and increased competition from domestically protected industries in other nations. This environment can deter foreign investment and negatively impact key sectors like IT, textiles, and pharmaceuticals, thereby slowing economic growth.
To meet these challenges, India must adopt a multi-pronged strategy. Diversifying its export markets beyond traditional partners is crucial to mitigate risks. Strengthening the domestic economy through initiatives like 'Make in India' and improving infrastructure will enhance self-reliance. India should also proactively negotiate strategic bilateral trade agreements to secure favorable terms. Focusing on improving the ease of doing business and fostering innovation will attract investment and boost domestic capabilities, making the economy more resilient to global trade uncertainties.
Answered By:
Sarvesh Jha
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Important Questions from GS3
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