India needs to capture some of the world markets if it has to sustain an 8-10 per cent growth rate over the next 20-25 years, a top planner has said but acknowledged that the country has been “slower” than others in entering into free trade agreements.
NITI Aayog Vice Chairman Arvind Panagariya said that “on the Free Trade areas, India has been certainly slower than other countries.”
He made the remarks here yesterday at a discussion organised by the Asia Society Policy Institute on the two years of the Indian Government responding to whether trade-led growth is a priority for the Government.
Panagariya said the broader question is whether “outward orientation” is part of the Government’s strategy of development, adding that his push is in that direction.
“I just don’t see that if India is to try to sustain a growth rate of 8-10 per cent over a period of 20-25 years, it can’t be done without actually capturing some of the world markets,” he said.
He added that apart from liberalisation, India would also need to focus on “internal reforms” like trade facilitation, speed at which goods can move in and out of the country and the various clearances required.
He noted that India’s internal goods market is less than $1 trillion while in the world market, merchandise exports stand at $18 trillion.
He said that in China, wages have been rising over 10 per cent a year for more than a decade and currently, they are 2-3 times the wages in India on an average.
“Wages are likely to rise much faster than they will rise in India. lot of labour intensive firms are moving out of China and India ought to be the natural destination for them,” he added.