The protectionism path

Budget continues the backward slide on trade

The Union Budget for 2020-21 has been presented at a time when demand in India is depressed and exports growth was negative for months after August 2019. It is unfortunate, therefore, that trade and industrial policy in the Budget appeared particularly incoherent. In some sense, the headline developments tell the story: This Budget has continued the trend of the past few years in raising tariffs. The justifications for this move are just import substitution and protectionism. The rhetoric of the Budget was not pro-trade in the least; “cheap and low quality imports” were effectively blamed for problems in employment generation.