• UGI USER
  • Oct 28, 2023
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Protectionism

Q. In the wake of increasing protectionism across Nations. Critically evaluate the journey of the Indian economy through the globalisation phase also suggest measures to have fair & just globalization.

Structure of Answer

Introduction

  • Define Globalisation, launched under Prime minister Narasimha Rao as part of 1991 LPG reforms.

Body

  • Explain the state of Indian economy in globalization era, explain both positive and negative impact on Indian economy
  • Explain Challenges in the Era of Rising Protectionism
  • Mention Measures for Fair and Just Globalization

Conclusion

  • Mention that in era of protectionism, India must pursue a balanced path, focusing on inclusive growth and sustainability

Globalization refers to the increased interconnectedness and interdependence of countries through the exchange of goods, services, information, and culture. India’s New Economic Policy in 1991, under Prime Minister Narasimha Rao, embraced globalization, liberalizing the economy to foster growth and international integration.

Indian Economy in the Globalization Era

  • Globalization fueled India’s economic growth, with GDP expanding The services sector, particularly IT and BPO, played a pivotal role.
  • India attracted foreign investments, becoming a hub for IT, pharmaceuticals, and manufacturing. Trade liberalization boosted exports, generated jobs.
  • Access to global technologies and innovations accelerated economic development.
  • However, Globalization intensified competition for Indian firms and resulted in job displacement, labor exploitation, Income inequality, Environmental degradation occurred as profit-driven enterprises exploited resources and polluted the environment.

Challenges in the Era of Rising Protectionism

  • Visa Restrictions: Stringent visa policies by countries like the USA have limited Indian IT professionals’ ability to work abroad, affecting the lucrative IT services sector.
  • Trade Wars: Trade tensions between major economies, such as the USA and China, have disrupted global supply chains, impacting India’s trade and manufacturing sectors.
  • Tariffs and Barriers: Increasing tariffs and trade barriers in key markets hinder India’s exports, especially in industries like steel, agriculture, and textiles.
  • Intellectual Property Rights: Stringent IP protection measures can hinder India’s pharmaceutical and software industries’ global competitiveness.

Measures for Fair and Just Globalization

  • Strengthening Regional Trade Agreements: India should focus on regional agreements such as RCEP, BIMSTEC, and strengthen existing trade pacts to enhance market access.
  • Diversify Export Basket: Reducing reliance on a few sectors and exploring untapped markets can minimize vulnerability.
  • Inclusive Growth: Emphasize pro-poor and inclusive policies to ensure the benefits of globalization reach marginalized sections.
  • Attract Sustainable FDI: Attract FDI that promotes sustainable and inclusive development, with a focus on skill development and technology transfer.
  • Boosting Domestic Manufacturing: Develop domestic manufacturing capabilities to reduce reliance on imports and strengthen the ‘Make in India’ initiative.

Globalization has been a mixed blessing for India’s economy. While it brought unprecedented growth and opportunities, it also created challenges of inequality and vulnerability. In the era of rising protectionism, India must pursue a balanced path, focusing on inclusive growth, sustainability, and global partnerships, to ensure fair and just globalization.