A gloom scenario in terms of Growth and prosperity around the world is emerging in past few months. Today, the Covid Pandemic has occupied the centre stage and it has made the nations rethink on how they conduct trade around the seas and land.
International Trade, as we see today has been historically placed through some of the important perspectives. Countries have immensely benefited and open economies have positively impacted domestic population.
However, with the Global pandemic on the spread, global economy will be in the downturn. It is not alarming to see that two of the most developed continents, North America and EU will be on the downturn and coincide. Their public Debt to GDP ratio will be very high due to massive trade deficits.
It is in times like these that we see India as a potential player to drive up international trade dynamics. It needs to ramp up its capacity to progressively achieve its $5 trillion target in the economy. Almost 50% part of this revenue will come from trade through what India exports and what it imports. Amidst all of this lies geopolitics of the South China Sea. Asian economy has a vast stake in this region due to geographical impediments and this is the region where China has a larger say. Trade and Geopolitics go hand in hand in Asia. This is the new world which we will see in the coming years.
Indian Industries have a huge role to play to ramp up Indian economy in terms of growth and international contribution to trade. Some of the principal challenges that can create hurdles for India vis a vis the world are MFNs, WTO restructuring, and FTAs. In the next set of years, we can expect Free Trade Agreements to be negligible, rather regional blocs like the EU are going to focus on RTAs.
This is a great opportunity for India to tie up pacts with the EU, as the EU will not compromise on the depth the trade agreements that might take place. This is also the time for India to have a trade pact with African Continent, where huge resources are a potential contributor for both Asia and Africa.
The future offer a lot of challenges for India to play its part in international trade. The current situation has lots of opportunities for India to be significant economy.
This digital session was a part of a series on”Covid-19 and the World Order”.