India’s Inward (Re)Turn: Is it Warranted? Will it Work?

Ashoka Center for Economic Policy, Policy Paper No. 01

27 Pages Posted: 1 Dec 2020

See all articles by Shoumitro Chatterjee

Shoumitro Chatterjee

The Pennsylvania State University

Arvind Subramanian

Ashoka University

Date Written: October 16, 2020


India is turning inward. Domestic demand is assuming primacy over export-orientation and trade restrictions are increasing, reversing a 3-decade trend. This shift is based on three misconceptions, which we dispel: that India’s domestic market size is big, India’s growth has been based on domestic not export markets, and export prospects are dim because the world is deglobalizing. In fact, India still enjoys large export opportunities, especially in labour-intensive sectors such as clothing and footwear. But exploiting these opportunities requires more openness and more global integration. Abandoning export orientation is thus akin to killing the goose that lays golden eggs. Indeed, given constraints on public, corporate and household balance sheets, abandoning export orientation is akin to killing the only goose that can lay eggs.

Keywords: Globalization, Economic Growth, India

JEL Classification: F6, O1

Suggested Citation

Chatterjee, Shoumitro and Subramanian, Arvind, India’s Inward (Re)Turn: Is it Warranted? Will it Work? (October 16, 2020). Ashoka Center for Economic Policy, Policy Paper No. 01, Available at SSRN: or

Shoumitro Chatterjee (Contact Author)

The Pennsylvania State University ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
United States


Arvind Subramanian

Ashoka University ( email )

Plot #2,
Rajiv Gandhi Education City
Kundli, 131028

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