With Indo-U.S. trade deal off, it is time India reorients its global economic engagement
The U.S.’s no-go stance on the FTA implies ambitions may have to be pared down but also provides an opportunity for India to holistically review its stance on global trade. It is refreshing that Mr. Goyal has signalled a revamped approach towards FTAs and reminded Indian industry there cannot be one-way traffic. This needs to be matched by actions that start unwinding India’s creeping walls of import tariffs. The Atmanirbhar Bharat campaign has further exacerbated that view — as the advent of a protectionist ‘closed market’ project. Strenuous exhortations that the self-reliance drive is one that seeks to integrate with global value chains can only go so far. Trade policy cannot be perpetuated in isolation and, in fact, affects investments too. Having walked out of RCEP, India needs to demonstrate to its potential FTA partners, including the EU and the U.K., with which rivals like Vietnam have already sealed a deal, that it is a viable alternative to China in a post-COVID world. To be a major trading and manufacturing nation, India can ill-afford to keep sending mixed signals.
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