Changes Required in Export Policies of India

Export Led Growth policies are derived from a presumption that the international market provides a bigger platform for a product or service than the domestic market and to regulate the former market, World Trade Organisation (WTO) agreements and rules came into force to usher in an era of free and liberal trade between member nations. However, in reality, in India, these policies have been trying to keep up with the world of growing protectionism where there has been a rise of ever-increasing tariffs in the last three decades on developing countries by developed countries which go against the concept of liberal trade. Although this is the ongoing trend, ultra-protectionism might not be the solution for India’s ailing economy as even developed countries like the United States of America had their Great Depression worsened after the ultra-protectionist Smooth Hawley Tariff Act was enacted, at a time when the States had a fairly agrarian economy like India. Therefore, in the end, India will have to formulate the export led growth policies in compliance with WTO agreements and rules provided that the demand side of the country is not overridden by its supply side as pointed out by Raghuram Rajan.