Issues:

 

(i) Negatively hurt India:

 

India is going to be hurt by USA policies on services. For eg. The rules on H1B visas which are being contemplated say that it will be particularly strict for H1B visas of companies where a large proportion of workers are H1B as well as where large proportion of workers work outside the company but not on companies inside USA. So, if google wants to hire an Indian engineer, it will be easy for it than for the Indian companies like Infosys or TCS to take an Indian engineer there.

 

(ii) Effect of technology:

 

Free trade is about competitive cost advantages which relates to the factors of production. If technology enables traditional economy which is not at an advantageous position wrt FoP earlier but can acquire the advantage because of the technology development, then it could afford to stay out of globalisation and grow.

 

(iii) Robotics and automation, artificial intelligence are now being placed in the cloud by IT companies and can be accessed from anywhere in the world. This means that location is not going to be an advantage. So unless India’s IT software industry which was a service provider till now embraces technology of this kind, it might feel the harsh heat of technological upgradation.

 

(iv) Thus to minimise the effect of protectionism, India will have to embrace the highest quality technology which is the requirement of digital economy.

 

(v) In terms of capital inflow, India is not highly dependent on the global economy. The globalisation was a trend which was at pace and India had to be a part of it to be integrated with world. Now when the globalisation is showing reverse trend, India will not suffer much as it was just half way through to gain the benefits of globalisation.

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