Economic liberalisation has done good to India, and the country needs to knock down import tariffs imposed on many products in the last three years, former Niti Aayog Vice-Chairman Arvind Panagariya said on Tuesday.
Panagariya also pointed out that COVID-19 pandemic may lead to integration of global labour market.
"Liberalisation has done good to us. We are reversing something from which we benefited. I thought that in 1991, India had give up import substitution, but in the last three years, import tariff on many products have been raised," he said while addressing CII Annual Session 2020.
"India needs to open up more and knock down import tariff imposed on many products in the last 3 years. We should bring tariff to 7 per cent and sign trade agreement with the US, RCEP and European Union," he said.
The eminent economist also expressed hope that down the line, India will sign trade agreements with the US, Regional Comprehensive Economic Partnership (RCEP) and the European Union.
Panagariya said India should continue to engage with Asia Pacific partners and get into RCEP as it prepares to take over the multinational companies from China in areas of textiles, footwear and other labour intensive sectors.
The professor of economics at Columbia University also pitched up for setting up Shenzhen-style coastal employment zones to boost manufacturing and creating employment.
Panagariya pointed out that there will be greater globalisation post COVID-19 pandemic in terms of integration of labour markets.
"Boundaries of the labour market will extend beyond H1 B visa as workers will work from their remote countries," he said, adding India could emerge as winner if it brings in major reforms in the education sector.
Panagariya observed that multilateralism had taken a hit even in the pre-COVID 19 days with bodies like the WTO Dispute Settlement mechanism becoming inoperative due to non-cooperation by the US.
"The COVID-19 crisis which has been currently sweeping the world is not likely to affect the process of globalisation," he stressed. Panagariya said India needs 2-3 large employment zones with full autonomy to change rules.
"Today 44 per cent of Indian workforce still involved in farming, you can't combat poverty without lot of farm workers moving out of farming to low skill industry," he argued.
Also, speaking at the event, Jeffrey Sachs, director of sustainable development, Columbia University, said that India made a big mistake in not joining the RCEP because this is an economic group catering to 3.2 billion people.
He stated that in light of the COVID-19 pandemic, countries sealing off their borders to prevent the virus from spreading in the country was not the same thing as reversing globalisation.