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Informist, Thursday, Dec. 12, 2024

--Fin panel Panagariya:Local trade not big enough to exploit many world mkts
--Fin panel Panagariya: World trade mkts today open more than ever before
--Fin panel Panagariya: India makes for small share of total global trade
--Fin panel Panagariya:Free trade, low tariff more important now than before
--Fin panel Panagariya: Need to be careful with investments from China
--Fin panel Panagariya: India needs to work on labour, land policies

--Trade secy: Energy transition next driving force of global mgf revolution
--CONTEXT: Trade Secy Barthwal speaking at CII Global Econ Policy Forum
--Trade secy on FTA strategy: Looking at ways to integrate value chains

NEW DELHI - At a time when global trade markets are more open than ever before, it is of unprecedented importance to have freer trade and lower tariffs, 16th Finance Commission Chairman Arvind Panagariya said Thursday. "The global market is very large. In addition to that, with innovation, it has become feasible to subdivide production activity into sub-activities in many different parts of the world, wherever it is least costly to produce," Panagariya said at the Confederation of Indian Industry's Global Economic Policy Forum 2024.

The economist's comments come at a time when US President-elect Donald Trump has held out tariff threats against imports from China and other countries, which could trigger a series of retaliatory tariffs, hurting global trade.

Panagariya said that currently the global trade volume is large, but India accounts for only a small share owing to its lack of scale. "There is plenty for us to exploit in the global market," he said. When it comes to competing with Asian counterparts for an increased share in global trade, India's land and labour policies become hindrances and need to be worked upon, he said.

However, on the suggestion made in the Economic Survey for 2023-24 (Apr-Mar) to open up to foreign direct investment from China, Panagariya sounded a note of caution. He said that while opening up to Chinese inflows would be welcome, the country must also weigh the consequences of opening up to an "opposition" nation. In that regard, he said, it would be best to open up those sectors for Chinese investment where China has already invested in other nations.

Commerce Secretary Sunil Barthwal, who was also present at the event, said energy transition would drive the next leg of the manufacturing revolution. He said India stands to benefit as electric vehicles gain more traction. He also said that at the heart of the country's free trade agreement negotiation strategy is the attempt to look at ways to integrate into global value chains.  End

Reported by Priyasmita Dutta and Krity Ambey

Edited by Rajeev Pai

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