RBI Governor Urjit Patel has cautioned against growing protectionist tendencies in major world economies. He said, calls for protectionism in the US are on account of equity and domestic distribution issues which should be addressed through domestic fiscal policy such as taxation and income transfers. Delivering a lecture at Columbia University in New York last night, RBI Governor said, using trade instruments for protectionism may take a nation on a trajectory different from that of growth.
He said, where would giant American corporations like Apple, Cisco and IBM be if they had not sourced the best products and talent from across the world. Mr Patel said, he does not think that we have heard the last word on US policy talk about protectionism because there is a push back internationally that the world has benefited from an open trading system. He said, the share prices of the most efficient corporations in the world, including in the US, are where they are because of the global supply chains. And if policies come in the way of that, then the big wealth creators in a country that advocates protectionism are ultimately affected, he said.