Panagariya cautions against trade protectionism

India needs to guard against trade protectionism for sustained economic growth, government think-tank Niti Aayog Vice-Chairman Arvind Panagariya said on Thursday.

New Delhi: India needs to guard against trade protectionism for sustained economic growth, government think-tank Niti Aayog Vice-Chairman Arvind Panagariya said on Thursday.

"No country has grown more than 6 per cent for longer period without trade growing very rapidly. Turning protectionist will not help because if trade doesn't grow, the economy would not grow," Panagariya said at an event here.

His comments assume significance against the backdrop of Narendra Modi government's 'Make in India' campaign to push domestic manufacturing which some experts say may impact imports.

Panagariya said that the economic growth picked up with the liberalisation of trade policy after 1991.

In the 1980s, "we were fighting for trade liberalisation in India and at that time it was a contentious issue," he said, adding that but today it is not a contentious issue.

"Export to Gross Domestic Product (GDP) was 7 percent in 1991, now it is close to 25 percent," he said.

He also said that in 1950s, when India's trade policy was more liberalised, import to GDP ratio was around 10 percent, but after that India started following import substitution policy which resulted in decline in import to GDP ratio of 4-5 percent.

India is aiming to nearly double exports of goods and services to USD 900 billion by 2020.

Most of the South East Asian economies such as Singapore, South Korea and Taiwan maintained exceptionally high growth rates between the early 1960s and 1990s on back of rapid increase in trade.

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