ECONOMY

TRADE POLICY NEEDS A RESET

Source: Indian Express

 Context

• India’s trade policy lays emphasis on sustaining policy flexibility while addressing the paradigms of change in global economic governance, following the path of technology led export driven growth and participative and proactive multilateral and bilateral trade engagement for developmental objectives.

Introduction

• India struggles to balance old policies with new tech opportunities. Vikas Bharat aims for a high-tech future by 2047. To succeed, India needs a say in global trade rules.

Details

Key aspects of Trade Policy

• Policy Flexibility:
  • Maintain measures for the disciplines of agriculture and fishery.
  • Respond to the prospects in digital business and electronics manufacturing.
• Global Economic Governance:
  • Change to new rules influenced by Geoeconomics and Sustainability.
  • Play a constructive role in global rule-making.
• Domestic Policy Reforms:
  • Promote technology-driven, sustainable growth.
  • To attract international investors; was third on the FDI list in 2022.
  • Striving for the export of goods to $1 trillion by 2030.
• E-commerce Market:
  • These markets are expected to reach $350 billion by the year 2030.
  • Presently, e-commerce exports are quite low, yet there are immense opportunities for the growth.
• Regulatory Reforms:
  • Based on the analysis, the major priorities include: digital transformation and enhancement of transparency, as well as operational optimization.
  • Have improvement-oriented laws for data protection, consumer rights, competition, and taxation laws.
• Sustainable Development:
  • Pledge to reduce carbon emissions by reaching the net zero status by the year 2070.
  • Enhance access to energy and decrease the emissions of greenhouse gases.
• Global Trade Negotiations:
  • Call for policy stability for the prime export destinations, mainly the US, the EU, and Japan.
  • Engaging in WTO negotiations on e-business concerning trade, climate change, and investment.

Challenges

• Policy Flexibility: Corporate business as a traditional sector versus new industries.
• WTO Resistance: Discussions on the enlargement of negotiation agenda to embrace e-commerce and climate change.
• Hindrance: Possible challenge towards vacancies in digital and high-technology fields.

Shifting Landscape and Opportunities

• Global Governance: Depending on its geographical and economic environment and information technologies, and being based on discussions about sustainability.
• Rising Stature: Demands constructive role in WTO.
• Domestic Reforms: Focus on the long-term sustainable growth and attracting FDI.
• E-commerce: The object of research has great potential but now it is used not very actively.

Need for Proactive Engagement

• Policy Predictability: Strengthen stability and constancy of a business environment in the most important export countries.
• WTO Participation: Of great importance in determining trade regime of the world.
• Leadership Role: Origin and grow talent within the Global South and shape global rules.

Way Forward

• Digitisation and Sustainability: Maximize resilient value chain and the manufacturing concept.
• Active Participation: Move beyond defensive positions in WTO talks.
• Learn from G20: It is recommended that this should be developed into the contingency plan as a proactive engagement strategy.

Conclusion

• Trade relations of India should change according to the world’s current scenario. In this way India – participating in formation of new rules of the WTO and adequately responding to changes taking place – will be able to seize new opportunities in the sphere of development of new branches and sectors, thus realizing the idea of Vikas Bharat.

Sources:

Indian Express