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- Globalization is not outdated yet.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.
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