The complex task of opening up cross-border markets to the movement of people, goods, services and capital flows and returning to pre-pandemic levels of international trade will play an important role as countries chart their recovery from the pandemic. Role in macroeconomic revival to complement and strengthen domestic reforms. But is this important aspect of globalization still possible, or is the whole phenomenon over? Are we seeing a return to the ‘country first’ policies reminiscent of the 1920s? Just as Francis Fukuyama’s triumphant declaration of the “end of history” in the early 1990s after the collapse of Soviet communism was completely wrong, so too was the prospect of the death of globalization too much to borrow the language of Mark Twain. It can be introduced exaggeratedly. However, a new era for its existence may require a new type of globalization.
Given the re-invention of globalization, India can potentially play a significant role as a new champion of globalization for three reasons:
First, given the increasing weight of Asia in global economic growth, globalization needs a new Asian champion. China, which has established itself as a major axis of the global trade supply chain over the past 30 years, may find it difficult to maintain that role. Worldwide, concerns over China’s supply chain dominance in the context of regional conflict risks in Asia, as well as growing concerns of debt stability in some countries due to Beijing’s Belt and Road Initiative, have prompted other Asian economies to separate their economic interests from China. can inspire you to do so. , As a large and fast growing Asian economy with a huge domestic market, India is well placed to play an important role by positioning itself as a supply chain option for the region.
Second, in the face of global protectionist pressures worsened by COVID, inflation, supply chain disruptions and changing geopolitical equations, India sought to navigate these shoals by striking without prioritizing bilateral trade agreements with developed countries and blocs Is. India has recently signed agreements with Australia and the United Arab Emirates, and is exploring such deals with other trading blocs such as the UK, EU, Canada and the Gulf Cooperation Council. The recent rapprochement with India by the US, UK and EU countries in the shadow of Ukraine conflict and India’s neutral stance have made the prospects of distant trade so far more tangible. Potential trade-deal partners may view India as a neutral trading partner (both for imports and exports), with New Delhi allowing such ties to play a larger role in the Indo-Pacific region in some cases. considered part of the broader agenda. ,
Third, and perhaps most important, global trade agreements are being churned out, which could result in India’s moment in the global arena. The US’s decision to withdraw from the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) calls on the EU against ratifying its negotiated investment deal with China, which it increasingly considers a “systemic rival”. and the decision to stay outside India. The China-dominated Regional Comprehensive Economic Partnership (RCEP) has had a significant impact on global trade equations. For decades, India had been knocking on the doors of the Asia Pacific Economic Cooperation Group, but the grouping has faced a serious downturn. On the Ukraine conflict, as seen in the recent US walkout. On the other hand, the transformation of the four-nation Quad partnership, originally referred to as the Security Group, into a Comprehensive Indo-Pacific Economic Agreement (IPEA) could provide for another. Alternatives to China-centric supply chain arrangements for economies seeking clean and resilient relationships. While the IPEA appears to be a shortened version of the CPTPP and RCEP, in terms of market access and tariff commitments, it may speak to India’s own interests and enhance our negotiating power in striking bilateral trade deals. .
Why should India play this role as a champion of globalization? The answer lies in the logic with which the Indian economy was liberalised. This included a growing trend towards the competitiveness of the private sector, away from a state-run and highly controlled economic system. The benefits of increased domestic competitiveness, higher value addition, supply chain efficiency and innovation across sectors can be strengthened through trade agreements that will help Indian industry find new export markets.
At the dawn of Indian independence in the 1940s and 1950s, Romantic idealism in the form of Asian non-alignment in Bandung and domestic Fabian socialism at home were the drivers of India’s global ambitions. As the record has shown, these eventually collapsed. A more clear-headed and pragmatic role for India that depends on equitable, fair and reciprocal trade relations with many countries and regions, backed by a liberal economic regime and other assurances of a globally competitive ‘self-reliant India’, we must may be allowed more permanently. And make our dream of global championships come true in the 21st century.
Cyril Amarchand Mangaldas’s partner Vijay Pratap Singh Chauhan contributed to this article.
Arjun Goswami and Avantika Kakkar are, respectively, the directors and partners of public policy, Cyril Amarchand Mangaldas.