So now that trade growth has been trumped, GDP growth too will be affected. The enormous impact of globalization is seen from the fact that global merchandise trade as a share of world gross domestic product increased from 27.7% to 50.3% between 1986 and 2011. In India, we saw a similar story—the share of foreign merchandise trade went up from 11.5% of GDP to 44.4% in 2012. So now that trade growth has been trumped, GDP growth too will be affected. Foreign investment has been lured by the size of the domestic market, not for using the country as a base for global value chains.

Source: Mint April 09, 2018 02:37 UTC