Davos: India sees growing signs of protectionism and will respond by taking measures of its own if its exporters are threatened, trade minister Kamal Nath said on Thursday.
His comments at the World Economic Forum in the Swiss ski resort of Davos were the latest warning that the global economic crisis could fuel protectionism to protect national industries and jobs.
“In some places there are sounds of protectionism, in some places it is real,” the minister told Reuters. “We are seeing greater use in the western world of anti-dumping measures, non-tariff barriers being used in Europe.”
As an example, Nath cited Dutch authorities’ seizure last week of a Brazil-bound shipment of a generic high blood pressure drug made in India.
He said India had taken up the issue with the Dutch authorities and the European Union, and hoped to resolve it.
“We do fear this because one must recognise that at the heart of globalisation lies global competitiveness, and if governments are going to protect their non-competitive production facilities it’s not going to be fair trade,” he said.
“If there are protectionist measures India will be compelled to also take commensurate measures against those countries which will be good for no one.”
India itself has raised tariffs on steel to protect local producers, a measure which trade experts say was aimed at China.
Nath said India would impose safeguard or anti-dumping duties on products from any country selling goods below cost.
The deepening economic crisis, and the failure to complete the World Trade Organisation’s long-running Doha round on freeing up global commerce, have raised fears that countries would block their partners’ exports to protect jobs at home.
Such protectionism, if it leads to tit-for-tat retaliation, would intensify the crisis, as happened in the 1930s during the Great Depression.
Egyptian trade minister Rachid Mohamed Rachid expressed concern on Wednesday at the way countries were rolling out stimulus and bailout packages to defend local industries and called for a more coordinated approach.
Nath said it was important for trading powers to continue efforts to complete the Doha round, launched in late 2001.
Ministers came close to a deal last July but stumbled over differences about a safeguard to protect poor farmers against import surges and calls by the United States for duty-free zones in some industrial sectors.
“I think that at this point the multilateral trading system more than ever before needs strengthening,” he said.
Despite the global crisis, Nath said India expects exports to grow by 17% this year.
Exports in April to November were 19.4% higher than a year earlier, but fell at an annual 9.9% rate in November itself.