At a time when the Central government says it is liberalising India’s economy, its economic policymaking on the external front has been marked by rising protectionism. With policies such as Atmanirbhar Bharat, there seems to be a conscious effort to protect the domestic economy from foreign competition. This raises questions on whether the government’s external protectionism is compatible with its promise of liberalising India’s economy. In a discussion moderated by Prashanth Perumal J., Biswajit Dhar and Ajay Shah talk about model of industrial policy that should be the way forward. Excerpts:
Is the government’s external protectionism compatible with its broader liberalisation agenda?
Biswajit Dhar: The kind of protectionism we are seeing in the name of Atmanirbhar Bharat is disappointing because while there is a case for having an industrial policy, where you invest in industries that you think could be globally competitive, what is happening in India is there is a long list of sectors in which the government has embarked on import substitution that encourages domestic production. What is problematic is that you’re not talking about efficiencies which will make these sectors globally competitive. The emphasis is on producing in India rather than on efficiency.
