Contents
Introduction
According to IMFs World Economic Outlook 2024, India contributed over 16% to global growth, yet rising protectionism in advanced economies—via tariffs, visa restrictions, and supply-chain barriers—poses systemic threats to Indias export-driven growth momentum.
Protectionism in the Developed World: A Resurgent Challenge
- Tariff and Non-Tariff Barriers: The USs 100% tariff on branded pharmaceutical imports and the EUs Carbon Border Adjustment Mechanism (CBAM) increase compliance costs for Indias pharma, steel, and chemical industries. Such measures represent neo-mercantilist tendencies, undermining global value chain integration.
- Visa Restrictions and Labour Mobility: The $1,00,000 H-1B visa fee hike discourages Indian IT firms, curbing service exports—Indias largest surplus sector ($325 billion in FY24). Curtailing skilled migration impacts remittances, which reached $135 billion in 2024—the highest globally.
- Supply Chain Reorientation: The China+1 diversification offers India opportunity but also exposes it to friend-shoring alliances that exclude it from Western production networks. WTO data shows global trade growth fell below 1% in 2023 due to rising trade fragmentation.
- Technology and IPR Barriers: Restrictive technology transfer regimes and tightened patent protections limit Indias access to frontier technologies—particularly in semiconductors, AI, and green hydrogen.
Why Indias Growth Faces Systemic Headwinds
- Export-Led Vulnerability: Merchandise exports ($437 billion in 2024) face market access constraints amid protectionist tendencies, particularly in pharmaceuticals, textiles, and IT-enabled services.
- Global Demand Slowdown: The IMF projects developed economies to grow below 1.4% in 2025, dampening external demand for Indian goods.
- Strategic Autonomy Concerns: Overdependence on external capital and technology increases susceptibility to policy shocks, necessitating Atmanirbhar Bharat as a structural response rather than a slogan.
Scale, Skill, and Self-Reliance: Indias Strategic Counter
Scale: Building Capacity and Competitiveness
- Massive infrastructure expansion—₹11 lakh crore public capex in FY25—and digital public goods (UPI, ONDC, Aadhaar) enhance production and transaction efficiency.
- Indias manufacturing PMI of 57.7 and foreign exchange reserves above $700 billion reflect macroeconomic resilience and confidence.
- Production Linked Incentive (PLI) schemes in 14 sectors, with $24 billion outlay, have catalysed $50 billion in investments and over 300,000 jobs, strengthening domestic value chains.
Skill: Leveraging the Demographic Dividend
- With a median age of 28.4 years and 65% population under 35, India is the worlds youngest major economy.
- The Skill India Mission and National Education Policy (NEP 2020) align curricula with Industry 4.0 needs—AI, robotics, and green technology.
- Global Skill Partnerships with Japan, UAE, and the UK enhance employability through internationally certified skilling models.
Self-Reliance: Strategic Atmanirbharta
- Self-reliance is integration with independence, not isolation.
- Make in India, Digital India, and Start-Up India link domestic innovation with global competitiveness.
- The Anusandhan National Research Foundation (₹50,000 crore) and semiconductor PLI push are fortifying indigenous R&D.
- Indias renewable capacity (220 GW) and leadership in the International Solar Alliance showcase sustainable self-reliance.
Broader Global Impact
- By building scale, skill, and self-reliance, India safeguards its role as a net contributor to global growth, ensuring supply-chain resilience for the Global South.
- As the developed world builds tariff walls, Indias strategy emphasizes open innovation, human capital export, and inclusive digital infrastructure—a model of equitable globalization.
Conclusion
As Amartya Sen notes in Development as Freedom, resilience stems from capability. Indias triad of scale, skill, and self-reliance transforms vulnerability into strength—preserving global growth amid protectionist tides.
