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

Date Written: October 16, 2020

Abstract

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: https://ssrn.com/abstract=3713253 or http://dx.doi.org/10.2139/ssrn.3713253

Shoumitro Chatterjee (Contact Author)

Johns Hopkins University ( email )

1717 Massachusetts Avenue NW
Washington DC, DC 20036
United States

HOME PAGE: http://www.shoumitroc.in

Arvind Subramanian

Ashoka University ( email )

Plot #2,
Rajiv Gandhi Education City
Kundli, 131028
India

HOME PAGE: http://https://www.arvindsubramanian.org

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