Martin Wolf predicts that India can be a hotspot for FDI

At the annual India
Policy Forum hosted by the National Council for Applied Economic Research
(NCAER), Martin Wolf, chief economics commentator for the Financial Times,
argued that India could use its privileged position to lead the search for
solutions to the climate, political, and economic challenges that have
contributed to the global polycrisis.

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Wolf, in a talk titled
“The World in a Polycrisis,” argued that India may establish mutually
beneficial ties with all parties involved in the current crisis. If it worked
really hard, it could replace China as a competitive global provider of goods
and services and become a magnet for Foreign Direct Investment (FDI), but it
shouldn’t give in to the temptation of introducing aggressive industrial
policies, Wolf said.

He claimed that the
problem’s resolution might be found primarily in domestic institutions, policies,
and politics. He also noted that although China’s growth is decreasing, it will
still outpace that of the West.

While discussing
“shifts, shocks, and fragilities in the world,” Wolf added that the
developed world had successfully contained its emissions to manageable levels
in recent years, shifting the burden of mitigating climate risks to the
developing or emerging economies.

However, Columbia
University professor and former Niti Aayog vice-chairman Arvind Panagariya
argued that industrialised nations should not tax developing nations with
climate mitigation. Panagariya, who moderated the conversation, also suggested
that past polluters should pay for mitigation costs because richer countries
occupy a disproportionate amount of carbon space.

After Wolf’s comments,
Montek Singh Ahluwalia, former Deputy Chairman of the Planning Commission of
India, claimed India’s trade restrictions are too severe. However, Niti Aayog
vice chairman Suman Bery, who was in the audience, disputed the idea that India
is becoming a closed economy compared to the US, which is an open economy. He
claimed there is no proof that India is uncompetitive in commerce or
investment.

Wolf noted that
wealthier nations are rapidly ageing. China’s experiencing the same. Sub-Saharan
Africa will stay young. India too.  Rapidly ageing nations must find fresh labour.
Young nations struggle to find work.

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