India unlikely to go into protectionist mode: Bhagwati

Lalit K Jha

Washington, Feb 7 (PTI) The global economic crisis that
has led to "protectionist" legislations being tabelled in the
US Congress is unlikely to push India into a similar mode,
renowned international economist Jagdish Bhagwati has said.

"On sliding back into protectionism, I just don't see
that happening. There's literally no evidence," he said.

It could be difficult to liberalise further, though, said
Bhagwati, who teaches at the Columbia University and is a
Senior fellow for International Economics at the prestigious
Council on Foreign Relations (CFR).

"I don't see the (Indian) government actually succumbing
to calls for protectionism. Whether they will go ahead and
liberalise it is a different issue, because it's a matter of
whether you go -- can you go forward?" Bhagwati said in a
conference call organised by the CFR.

"I don't think you can in India any more than in the
United States and elsewhere, simply because to liberalise is
difficult when you have, you know, substantial economic
difficulties," he said.

Bhagwati said there are some people in India who are
still on the same bus as in the '60s and '70s, when they were
against any kind of international engagement on trade and
incoming foreign investment.

"Then we changed those policies in a substantial way, and
we've had massive impact on the growth rate and on poverty as
a result. Many more -- 200 million people have been pulled
into more gainful employment... and out of poverty," he said.

"So I think the evidence is clear, the middle classes are
again in favour of not going back on reforms," Bhagwati said.

Referring to recent developments on the tariff front in
India, Bhagwati said while a couple of tariffs did go up, but
they were being restored to the original levels within the
last two years "because of the food crisis and so on".

Some of the tariffs had been reduced, he added.

"The actual reply tariffs had been reduced by the finance
ministry. And now that the food price situation has gone the
other way, they're just being restored to original levels. So
it's not really -- there's no protectionism to speak of,"
Bhagwati said.