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India’s inward (re)turn: is it warranted? Will it work?

Author

Listed:
  • Shoumitro Chatterjee

    (Johns Hopkins University
    Centre for Policy Research)

  • Arvind Subramanian

    (Brown University
    Center for Global Development
    Peterson Institute for International Economics)

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 labor-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.

Suggested Citation

  • Shoumitro Chatterjee & Arvind Subramanian, 2023. "India’s inward (re)turn: is it warranted? Will it work?," Indian Economic Review, Springer, vol. 58(1), pages 35-59, July.
    • Handle: RePEc:spr:inecre:v:58:y:2023:i:1:d:10.1007_s41775-023-00156-1
    DOI: 10.1007/s41775-023-00156-1
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    References listed on IDEAS

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