GS3 · 10 marks · 150 words

Discuss the implications of the rising trend of protectionism and tariff wars in global trade for India's macroeconomic stability.

Answered by 3 toppers · CSE 2025

Macroeconomic IndicatorsTrade and Foreign InvestmentIndustrial Policy and Liberalisation

Syllabus: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

How toppers approached it

From all 3 answers · about 150 words · 33% drew a diagram.

Opening

  • A figure2 of 3
  • A date or context1 of 3

Body

  • Points2 of 3
  • Points and prose1 of 3

Close

  • A way forward3 of 3

The toppers’ answers

Ujjwal PriyankAIR 10 · CSE 2025 · 113 wordsTheir whole copy

Opening · a recent event

The recent decision by President Trump to impose reciprocal tariff and policy of "Make America Great Again" has made protectionism the new normal. This will have wide implication on India's macroeconomic stability as it will disrupt supply chain.

Body · points and prose

  • Eq. 50% tariff on Indian exports to USA.
    • 2. Trade weaponisation
      • Reversal of globalisation
      1. Changes in supply chain
      • Threatens world order
      1. Reduced global consensus
      • Violation of WTO

This will have wide implication on India's macroeconomic stability as it will disrupt supply chain.

  1. Reduced growth forecast for FY 2025-26 due to reduction in exports (currently at ~6.5%)

  2. Impacts investment from foreign firms in Indian economy.

  3. Higher cost of Indian goods in western market → reduction in demand.

  4. Reduction in the manufacturing sector such as textile.

  5. Reduced competitiveness of Indian good vis-a-vis goods from Vietnam, Bangladesh etc.

Close · a way forward

India must leverage its policy of multialignment to diversify its supply chain for Viksit Bharat @ 2047.

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