India is moving forward towards development whether it is in the field of education, research or trade. With Modi becoming Prime Minister of India, a sharp upturn in the number of foreign investors and step towards “ease of doing business” along with the “MAKE IN INDIA” have been noticed. But at the same time efforts of India to broaden room for domestic industries by emphasizing upon ‘Trade Protectionism’ has attracted negative impact on foreign investors that resulted in undermining their confidence in foreign investment and WTO policies which lay downs free trade between the countries. Here, we need to dig into what exactly is “Trade Protectionism”. It is a policy that circumscribes international trade with the upliftment of protection of local businesses from foreign competition. And for the fulfilment of this approach there are methods such as tariffs, subsidies or tax curbing for local business. It leads to increase in price of imported goods and services, and thereby making them more exorbitant for consumers. Trade protectionism attracts half full or half glass philosophy which calls pros and cons at the same time.
Here we need to emphasize upon the other side of the trade protectionism which will impact economic growth in India. As engulfment of trade protectionism would land up on losing off trade from foreign countries, it would leave domestic consumers with limited basket of choice without cut-throat market competition. But at the same time, in order to enhance productivity, protectionism in other way will protect the domestic industries from foreign competitors and thereby, gradually pushing infant industries to learn to produce the goods on their own and the employment rate on another hand as domestic companies could be protected by tariffs.
But if India looks at another phase it would be called retaliation with the foreign traders, such as China which is one of the biggest steel exporters to India, by erecting their own protectionism within that industry.
India’s stand on trade protectionism has received censure at various platforms. It has been said that this approach will no longer emerge as a great step to eradicate the problems of unemployment and economic slowdown in India. There is a dire need to give the government pause for thought so that India’s economy which has engulfed with an increase in foreign trades, tie up with various developed countries such as USA in previous years. The Indian Government needs to ensure that its trade policy on a par with the factors that encourage India’s potential.