Growing protectionism can hurt India's growth
During the boom years between 2003-2011 India's real GDP growth averaged 8.2 percent.
New Delhi: With Trump Presidency and Brexit pointing towards growing protectionist tendencies in the world, the Economic Survey expressed concern that it could hit India’s GDP growth.
“Given that India’s growth ambitions of 8-10 percent require export growth of about 15-20 per cent, any serious retreat from openness on the part of India’s trading partners would jeopardise those ambitions,” said the survey.
During the boom years between 2003-2011 India’s real GDP growth averaged 8.2 percent, and exports grew at an annual rate of between 20 and 25 per cent (in real dollar terms, for goods and services).
“The political backlash against globalisation in advanced countries, and China’s difficulties in rebalancing its economy, could have major implications for India’s economic prospects. They will need to be watched in the year – and decade – ahead,” said the Survey.
It said that from India’s perspective, the political carrying capacity for globalisation is relevant not just for goods but also services. The world’s service exports-GDP ratio is about 6.1 percent.