Need for Broadening Trade Horizons
India needs a rethinking on its foreign trade policy to counter the present turbulence in the international market.
- Although the economic fundamentals appear to be still intact
strong, India needs a rethinking on its foreign trade policy to counter the
present turbulence in the international market following the new tariff policy
announced by the United States (US). While continuing talks with the US, India
should simultaneously look out for new trade partners -- Africa, Southeast Asia
and South America -- done considering the fact that the world market is in a volatile
condition; it will be unwise to keep all the eggs in a single basket in such a
situation. China and the European Union (EU) have already started their quest
to recalibrate their trade ties in wake of the bitter tariff war against the
US. India needs to take a similar path as there are enough indications that
present uncertainty has started affecting the country’s economy. While the
world economy is expected to grow at just 2.8 per cent, the Indian economy is
projected to grow at an impressive rate of 6.2 per cent despite lowering the
growth forecast from 6.5 per cent amid the prevailing geopolitical tensions.
This figure may dip even further if the ongoing tariff war continues.
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- Besides the gloomy global trade scenario, war clouds appear
to be gathering over the sub-continent in the wake of the recent horror
unleashed by terrorists in Pahalgam, which is not a good sign for any economy.
Amid negative impact of the COVID-induced prolonged lockdown across the world
and the subsequent global uncertainties, Indian economy has shown resilience.
However, a war is bound to affect the economic growth of not only the parties
involved; it will have a ripple effect as is evident in the ongoing conflicts,
especially Ukraine-Russia and Israel-Hamas wars. While global community must
speak with one voice in fight against terrorism, war anywhere should be avoided
at all costs in the best interest of everyone- for the sake of world peace and
economic prosperity. Meanwhile, India should chart a roadmap for sustainable development
and economic growth by broadening its trade horizons and focus on concentrate
more on bilateral trade rather than depending on a couple of developed nations
to keep its balance of payment (BOP) situation in good shape. In all, India
should play a proactive role in keeping its economy on the rails.
