- 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.
- 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.
- 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.
- Globalization is not outdated yet.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.
Q1) Analyse how globalisation, liberalisation and increasing penetration of internet is transforming lives and structures of middle class families in the Indian society.
Q2) Do you think free trade, a component of globalisation, is creating inequality around the world? Critically examine.
Q3) How does protectionism in developed countries affect India and other developing countries? Examine.