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Why India needs to reset its trade policy
Shubhra Ranjan, 2024-07-09
Introduction
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* India has been resistant to expanding the World Trade Organisation’s negotiation agenda in
domains such as e-commerce, trade, climate change, and investment facilitation.
* The country’s stance is primarily rooted in preserving policy flexibility for its economic
development strategies.
* This approach suits traditional sectors like agriculture and fisheries but may hinder new
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opportunities in emerging fields such
* The vision 2047 envisions India as a technology-driven economy, with an ambitious goal of
catapulting into a developed economy within the next 25 years.
The rules of global economic governance
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* The rules are being reshaped in a world moulded by geoeconomics and emerging technologies,
resilient global value chains and environmental sustainability.
* India has stakes in this new paradigm.
* India’s rising global stature demands that it plays a constructive role and projects its distinct
personality in managing differences amidst changing dynamics.
* India’s domestic policy reforms are designed to promote its global integration by aiming to
foster technology-driven and environmentally sustainable economic growth.
* The country is a favoured choice for global investors.
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* It aims to boost goods exports to $1 trillion by 2030, positioning itself as a manufacturing
powerhouse.
* Its e-commerce market is set to surge to an astounding $350 billion by 2030.
* However, the current e-commerce routed exports of $3.0-3.5 billion constitute only 1 per cent of
total exports.
* Globally, e-commerce routed exports are predicted to reach $2 trillion by 2030, offering India a
substantial opportunity for export growth.
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* The desire to seize the opportunity presented by e-commerce has played a pivotal role in
driving regulatory reforms in India.
* These initiatives have led to reforms in critical areas such as data protection, consumer rights,
competition and taxation, fostering a more conducive ecosystem for e-commerce enterprises to
thrive.
* The country has committed to achieving net zero carbon emissions by 2070
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* It has made significant achievements in improving energy access and reducing greenhouse gas
emissions.
Shed hesitancy
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* India must shed its hesitancy and actively participate in negotiations concerning e-commerce,
trade, climate change, and investment facilitation within the WTO.
* The policy reforms taken in the wake of the 1991 economic crisis broke down trade barriers,
attracted foreign investments, and fuelled economic expansion.
* In the present context, India must adeptly manage its growth trajectory, emphasising
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digitisation, sustainable development, and resilient value chains to bolster its manufacturing
sector.
* International consensus on rules and disciplines related to emerging economic issues and
navigating the evolving geo-economic landscape is in the country’s best interest.
* India’s active participation in the WTO discussions is crucial, even for successful bilateral
engagement subsequently with major markets.
* Participation will allow India to build a leadership position in the Global South.
* Our lack of engagement has not deterred other nations from forging a consensus among major
economies regarding new regulations in the realm of disruptive technologies or formulating
unilateral carbon border adjustment measures inimical to Indian business interests.Bottom of
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Conclusion
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* India must break away from its traditionally held defensive positions.
* To achieve the ambitious export targets and accelerate GDP growth, the country aims for a
higher trade-to-GDP ratio (ideally 30-35 per cent).
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* India’s forward-looking approach to shaping multilateral disciplines in trade and investment
matters has been demonstrated vividly through its active participation in G20 forums and
bilateral trade and investment negotiations with economically advanced nations.
* A similar proactive engagement strategy should also be extended to WTO negotiations. It will
be pivotal to achieving its national economic development objectives.
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