Mumbai: Finance Minister Arun Jaitley today expressed concern over increasing protectionist tendencies in the developed world and warned that growing populist backlash against globalization and free trade could have an adverse effect on the world economy. Delivering the key-note address at the BRICS Seminar on Investment Flows : Challenges, Opportunities and Road Ahead, in Mumbai Mr. Jaitley said “If developing countries see a trend of protectionism, the spillover impact on the policies in other parts of the world would be adverse.”
Finance Minister mentioned Britain’s vote to leave the European Union and aggressive criticism of trade deals in the US Presidential Election debates as worrisome developments. He however hoped that the fears about free trade will subside once the the US Presidential election is over. “The tenor of the debate is more protectionist during elections and much less when you get back to business as usual,” he observed.
Mr. Jaitley asserted that aggressive push to domestic reforms can neutralize the impact of ongoing global slowdown to a considerable extent. Stating that the ease of doing business has improved massively in recent years, Mr. Jaitley said many sectors have now been brought under the automatic approval route. “Over the last two-and-a-half years most of the sectors have been reviewed and we now have probably the most open FDI policy in the world with 90 per cent of FDI coming in through the automatic route,” he said.
The Finance Minister also said that many policy changes in the recent past have added to the ease of doing business. “Our ranking both in the ease of doing business and also in global competitiveness index has moved up significantly in the last few years. And this has been aided by a large number of policy initiatives which have been taken by the government” he said.
Mr. Arun Jaitley further said the BRICS as a concept has taken a concrete shape and the areas of cooperation among the member nations are ever increasing. “We now have a BRICS institution in the form of the New Development Bank and in a remarkably short period of time it has initiated its own projects which it is financing. A contingency reserves arrangement is in place now and there is going to be increased cooperation in the area of customs and taxation,” the Minister said.
RBI Governor, Urjit Patel, who was also present said that BRICS must work on improving business environment. SEBI Chairman U K Sinha called for establishment of more BRICS institutions like New Development Bank.
The BRICS Seminar on Investment Flows, organized by Ministry of Finance, Reserve Bank of India and SEBI was held as part of run-up to the BRICS Summit being held in Goa on October 15 – 16. The high level Summit is being held with the theme of Building Responsive, Inclusive and Collective Solutions.