Cautioning against the possibility of trade imbalances if corrective measures are not taken, Srini Raju, Member of the ISB Executive Board, said, “India may have to shell out huge forex reserves in the changing economic order.”
Raju, who is also Chairman of iLabs, was speaking at the inaugural session of Deccan Dialogue, a conference on economic diplomacy for development, hosted by the Indian School of Business.
“Many countries have signed Free Trade Agreements without realising the long-term implications on their economies,” he said.
Referring to the economic countermeasures initiated by US President Donald Trump against China, Raju said, “Trump is trying to use economic diplomacy very effectively... Likewise, India, too, will have to do some serious thinking with regard to IT, electronics and pharma exports.”
He cautioned against a scenario where India could be dependent on other countries for the ingredients of even basic drugs.
Gains and losses
Over the past three decades, the Indian IT industry has grown to be significant and due to open access in the US, exports account for about $100 billion. “But what is worrisome is that we may lose what we have gained from the US when we import items from other markets, including electronics, which are now estimated to be about $70 billion and projected to grow to $200 billion,” he said.
Raju said, “We are faced with such a trade imbalance scenario because we did not understand the tariff regime well. These could be addressed with some strategic thinking and planning.”
Telangana Industries Minister KT Rama Rao explained how the State reached the top slot in the Ease of Doing Business ranking in a very short time, and said competition among States is becoming intense. He suggested that diplomats engage with States.
Jennifer Daubeny, Consul General, Consulate of Canada, South India, shared her perspectives on how Canadian cities have formed a consortium to attract investments.
J Krishna Kishore, CEO of the AP Economic Development Board, shared his perspectives on how the State is attracting investments.
S Sivakumar, Head, Agri and IT Business, ITC Ltd, expressed concern over the sustainability of agriculture and the growing challenges to the sector, on which more than 50 per cent of the population is still dependent.
BusinessLine is the media partner for the event.