Reorient China Trade, Forge Deals With Others, Have Courage To Open Up: Arvind Panagariya

NEW DELHI: India has a “tough neighbourhood and needs to deal with it,” Arvind Panagariya, Former NITI Aayog Vice Chairman and professor of economics at Columbia University says. Speaking to StratNews Global Associate Editor Amitabh P. Revi on China’s ambitions of displacing the U.S. as the world’s number one power he points out, “India is an obstacle to Beijing first becoming the regional number one power.”

Prof Panagariya has changed his mind on the need for India to negotiate joining the Regional Comprehensive Economic Partnership (RCEP is a 15 nation proposed free trade agreement being worked out by the 10 ASEAN countries, Australia, China, Japan, Korea, and New Zealand). He says,”After Galwan, India can no longer trust China” as the Chinese Communist Party “mixes up everything from defence to economic and foreign policy”, adding, “We then become vulnerable to Chinese economic sanctions.”

On Huawei and 5G technology, Professor Panagariya agrees that “whatever action necessary” should be taken “whenever there is a direct security threat”, but he strongly “recommends against starting a full scale, full blown trade war with China”. He instead advocates a “calibrated reorientation of trade away from China”. India “should not do it in a way that hurts ourselves, by restricting imports from China with whatever means possible including higher tariffs.” India should “make trade with other countries more attractive. That can be done by forging free trade agreements with other partners such as the European Union, United Kingdom, Canada, Australia and down the road the United States.”

The author also talks about his latest book, ‘India Unlimited – Reclaiming The Lost Glory’ and discusses the opportunities and challenges to moving global supply chains out of China, COVID and the impact on globalisation, economic reform in India, the government’s coronavirus stimulus package, the fiscal deficit and debt, the jobs market, how Delhi should be focussing on a larger share of the global, labour-intensive merchandise trade pie and the pros and cons of the National Education Policy (NEP).