Finance Minister Arun Jaitley on Thursday cautioned that the spillover of protectionist policies of developed countries to other parts of the world could be extremely adverse.

“I do believe that there are trends in the world today which on the surface do indicate that the world is increasingly moving towards protectionism. These worries are real,” said Jaitley at a BRICS Seminar on Investment Flows, organised jointly by the Finance Ministry along with the Reserve Bank of India and the Securities and Exchange Board of India.

The Minister felt that if developed countries persist with this trend, the spillover impact of those policies on other parts of the world could be extremely adverse.

The other example on protectionism which Jaitley mentioned was the tenor of the election debate in the US.

“I think the fears are real because it (the debate) is becoming increasingly more and more protectionist. But as a participant in democratic elections my own experience has been that some statements are made during the elections but the burden of governance suddenly, subsequently brings about a change,” he said. Jaitley underscored that every significant decision taken by the NDA government is aimed in one direction — to promote economic activity and to make the economy more investment friendly.

“I think the other silver lining seems to be that the States have also become extremely competitive.

“A large number of state governments are also becoming increasingly investment friendly and each of their proposals is intended to attract investments and make themselves more and more competitive,” said Jaitley. He said the country has learnt that through domestic reforms the impact of a global slowdown can be neutralised to a large extent.

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