Globalization - India's Response

What is the issue?

• The increasing protectionism in the West is leaving way for arguments against the relevance of globalization at present.
• It is essential that India evaluates its policies and approaches at this transitioning juncture.

What results has globalization created?

• Flows from private sector in the form of FDI and FII have become more important than flows from World Bank Group and ADB.
• Globalization has made the world more inclusive.
• The big gainers have been Asian countries, led by China, but India is also in this group.
• These countries have grown faster than the industrialized countries, and increased their share in global GDP.
• Also, there is a huge reduction in global poverty and inter-country inequality, even if inequality within countries has increased.

What are the recent anti-globalisation signs?

• Movement of people - The movement of people, an important aspect of globalization, is now increasingly being restricted.
• The US administration is restricting H-1B visas, turning back Mexican migrants, and making work visas for foreign students more difficult.
• There is opposition to non-European immigration in many European countries .
• Brexit is an example of turning down a treaty in order to restrict European immigration.
• Trade - This is an area most governed by treaty obligations, and there is clear evidence of regression in this.
• Many countries introduced protectionist measures after the 2008 financial crisis.
• The US, once the flagbearer of trade liberalization, is withdrawing from trade agreements agreed earlier.
• This include the Trans-Pacific Partnership, North American Free Trade Agreement, and the free trade agreement with South Korea.
• The withdrawal of such commitments are increasingly influencing other countries' stance on multilateral agreements.

What lies before India?

• Globalization is not outdated yet.
• It only seems to need reformation and reset.
• India should therefore push to build support for a new inclusive second phase of globalization.
• It has to address the problems with the changing nature of globalization.
• This includes problems such as land acquisition, forest clearances, environmental impact clearances, etc.
• Working in these fronts is essential to attract the private capital market to finance infrastructure projects.
• India needs to remain committed to maintaining an open trade policy and not be distracted by the increasing protectionism in the West.
• Industrial policy should go beyond tariff reduction and focus on providing infrastructure and a supportive policy environment.

Source: Livemint