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Davos: Trade disruption and domestic innovation dominate
20 Jan
Summary
- Global trade is shifting from multilateral to bilateral agreements.
- Protection of domestic manufacturing is becoming a priority.
- India needs to build its own research and development ecosystem.
Global discussions at the World Economic Forum in Davos are now prioritizing trade disruptions and the imperative for domestic innovation, according to Essar Capital Director Prashant Ruia. He observed a significant departure from previous years, with a sharp focus on the risks associated with diverging international trade policies.
Ruia explained that the established global trade order, once championed by frameworks like the WTO, is fragmenting. Countries are increasingly favoring bilateral trade arrangements, a trend partly fueled by Western economies seeking to retain manufacturing jobs and protect industries from cheaper imports.
He further articulated the challenge faced by Western economies in balancing open borders with domestic manufacturing preservation. The higher costs of production in these regions necessitate a degree of protectionism, making the battle to retain manufacturing a winning one.
