News: Alice G Wells, US State Department’s top official for Central and South Asia, said that India has been restrictive in its global economy in the past and in the post pandemic world, there is a “window of opportunity” for India to enter the world market.
Here are five components of the story:
- Wells said on May 20 that countries will be looking to diversify their supply chains post the pandemic, which will serve as a good opportunity for India.
- This interest in diversifying supply chains in part stems from the world economy’s huge dependence on the Chinese markets for labour, resources and manufacturing across industries, a dependence that economies will now attempt to avoid due to the wariness about the spread of more infectious diseases.
“In the post-pandemic environment, countries are looking at a little bit of de-globalisation and onshoring of the critical production. And at the same time, there’s a very vigorous effort to diversify supply chains…”
“And this is a real moment of opportunity for India by adopting a more open and welcoming policies by reducing tariffs that allow manufacturing companies inside India to be part of the global supply chain…”
- Wells contended that the Indian economy has been restrictive and closed in the past by way of its tariff policies and its inward-looking protective policies. She asserted that India and the US could potentially have a strong economic and political relationship based on PM Modi and President Trump’s relationship, and to fortify this relationship India needs to open up its economy further.
- However this seems to come in opposition with Modi’s “Aatmanirbhar Bharat” outlook, a policy that suggested a more inward-looking protectionist form of economy in the post-pandemic world.
- Indian economists have recommended policies of increasing trade tariffs and a more closed economy in the post-pandemic world so as to protect and allow for growth of the domestic economy, MSMEs who have been crippled by the pandemic and cannot compete with MNCs.