You Win Some, You Lose Some, and Some Get Rained Out: A Study of Some Recent Trade Policy Instruments Used by India in the Context of Neoliberalism

Abstract

In an era when free trade has been championed by neoliberal policies across the world, there is surprisingly high usage of trade-restricting measures adopted by developed and developing countries. While dissatisfaction with the neoliberal doctrine of free trade is the most important reason behind these policies, it also symbolizes a return of nation-states against the forces of globalization. Policymaking in international trade can be tricky as several trade policy instruments can have very different impact on different domestic stakeholder groups. This chapter discusses these challenges using a study of the usage of trade policy instruments by India. In the last few years, India is seen to be using a number of policies aimed toward managing trade more effectively. The two sets of instruments which have been used frequently are the ‘Minimum Import Prices’ (MIP) and trade remedial measures like antidumping duties. This chapter will focus on these two sets of trade policy instruments to analyze the rationale behind their use. Recent controversies around these instruments suggest that while they give protection to some domestic stakeholders, other domestic players in the value chains may get adversely affected by these policies. This leads to some inter- and intra-sectoral trade-offs. This discussion will lead to a broader debate about the neoliberal policies propagated by the World Trade Organization (WTO) and their conflict with policy space available to developing countries for managing trade policies to suit their national objectives.