- Economic Nationalism is conventionally seen as an ideology which favours domestic control of the economy, labour and capital formation.
- Unlike globalisation which promotes interdependence among nations, economic nationalists favour tariffs to restrict free trade, promote indigenous industries and seek import substitution.
- Unlike globalisation which promotes interdependence among nations, economic nationalists favour tariffs to restrict free trade, promote indigenous industries and seek import substitution.
- Benefits of Economic Nationalism
- Helps protect domestic market, particularly in the nascent stage of nation-building. For example,
- After independence, India adopted Import Substitution for self-reliant economy.
- India still reserves certain items for public procurement from MSEs.
- Prevents drain of foreign exchange caused by imports.
- Facilitates local employment by promoting domestic businesses including MSMEs.
- Helps protect domestic market, particularly in the nascent stage of nation-building. For example,
- Concerns associated with economic nationalism
- Protectionist policies stifle innovation by lowering competition from foreign businesses.
- e.g., prolonged protectionism led to the Economic crisis in India in the 1990s that prompted 1991 economic reforms.
- May lead to trade wars, imperialism and conflicts as was seen during the 20th century.
- Economic isolation can lead to political and cultural isolation.
- Protectionist policies stifle innovation by lowering competition from foreign businesses.
Economic nationalism in India
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