19/09/2020 - Indian Economy

KEY POINTS

·         A broader trade policy review is what India needs at this juncture, for speedy recovery amidst changing dynamics of trade policies globally.

·         The weakening of WTO is a clear signal that multilateralism is being overtaken by unilateralism, bilateralism and economic nationalism. Besides, stronger involvement of the state in the economy and weaponisation of trade policy to achieve economic and geopolitical objectives are weakening the global trade order—especially the multi-lateral rules-based order.

·         SMEs in India are contributing significantly to employment generation, exports, innovation and inclusive economic growth. SMEs account for 45% of industrial production, 40% of total exports and also significantly contribute to GDP.

·         Therefore, it is of utmost importance that market access and better trade facilitation for SMEs are provided in the partner countries. The Covid crisis has turned a boon in disguise as it has accelerated the digital revolution. With no other option available, businesses are proactively using e-commerce, e-services, etc, for their functioning.

·         Digital trade has taken a prominent position, and these trade practices will likely continue. Notably, the contribution of digital trade in facilitating global value chain and developing innovative products and services cannot be undermined.

·         India has provided a robust policy framework for effective data privacy and protection and regulating digital services. Besides, new technologies involving artificial intelligence, block-chain, 3D printing, etc, are rapidly influencing the way trade has been done.

·         While e-commerce negotiations are on in WTO, India has chosen to stay away. Nevertheless, India is formulating a revised e-commerce policy. Therefore, harmonising e-commerce policy for integration with a larger group of countries will mitigate the risk.