India should ride out the current global “trade wars” better than the world’s biggest exporting economies.
In fact, India’s “trade detached” economy now has new opportunities.
India can now fast-track trade agreements with the EU, UK, Australia and Canada, while deepening ties with China, Russia, Japan, South Korea, and Asean.
It also has much to gain from reforms, such as simplifying its own tariffs, making a smoother goods and services tax (GST), improving trade processes and applying fairer quality controls.
India is the world’s fifth-largest and fastest-growing major economy.
India’s vast domestic market (around 1.5 billion people) has fuelled its growth.
All of this means India has a lower exposure to global goods trade.
With export-driven economies slowing down under tariff pressure, and India continuing to grow at 6%, it looks well placed.
“Trade detachment” is turning into an advantage.
Critics have often described global trade systems as simply colonialism in disguise – partly accounting for why India does not focus too much on trade
But “trade detachment” has come at a cost – between 1951 and 1981, per capita income grew at a sluggish pace of just 1.5% a year.
1991 is celebrated in India as the turning point.
Between 2002–03 and 2011–12, India’s exports of goods and services surged six-fold, soaring from $75bn to over $400bn.
Consider how huge this is – per capita income grew more in the first 17 years of the 21st Century than it did throughout the entire 20th Century.
This is the miracle of modern India.
However, the “make in India” program has struggled, yet also had impact as global countries move to diversify from China.
Now the European Union is reaching out to India.
In the scramble for reliable trade partners, India is suddenly attractive.
Into India 