Vol. 4, Issue 3 (2019)
The way forward to globalization……protectionism?
Author(s): Sonia Varma
Abstract: In 1991, India adopted a biggest revolutionary measure, the introduction of LPG policy i.e. liberalization, privatization and globalization. It emerged out to be the biggest game changer for India as, it not only allowed cross border trading but give an opportunity to India to introduce itself as a largest major economy in the world and further it has been proved that as of now India is one of the most open economy in the world. Indian economist Arvind Panagariya in his speech suggests that developing economies such as India have gained enormously from the freeing of trade. But now when the LPG policy has passed 27 years with full success and achievements the scary clouds have now been grown over due to the very buzzword ‘Protectionism’. Many countries are becoming inward focused and globalization is shrinking. Forces of protectionism are raising their head against globalization. The intention is not only to avoid globalization itself but also to reverse its natural flow. The result of all this is that we get to witness new types of tariff and non-tariff barriers. Recently, the US Donald Trump administration ‘America First’ initiatives have further add fuel to this fire against cross border integration. All these developments represent greater headwind to global trade and growth. According to IMF (International Monetary Fund), if protectionist pressures increase, the combination of declining global trade and growth would increase corporate vulnerability that may lead to financial stability risks. Thus, this paper tries to analyze the different causes and consequences of protectionism and the various ways through which this issue can be handled in more effective and efficient way.