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Emerging Issues in International Relations

What is the scenario of global economy?

1. The global economy has contracted to around 3%.

2. There is shutdown of industry, transport and communication.

3. There are changes in the pattern of global trade due to Covid-19.

4. The pandemic is primarily disrupting trade, supply chain and investment flow.

5. As the pandemic could continue, there is a need to ensure faster recovery of economy.

Why there is a change in FDI policy?

1. Foreign Direct Investment in India comes from all over the world.

2. One clause in FDI policy has been changed, making an investment from countries that share land borders with India to be scrutinized.

3. This change is mainly to target China and to support economic recovery in India.

4. This is in line with the global trends as the United Kingdom, Germany and many other countries have also put in a lot of measures.

5. China’s economy is working with about 80% of its capacity and has over 3 trillion-dollar reserves of economy.

6. But other economies are still recovering from the economic slowdown caused by Covid-19.

7. So, this is a precautionary measure is taken to stop predatory takeovers.

How is India redefining itself globally?

1. The current century is regarded as the Asian century with multiple centres of power such as Japan, Vietnam and other G20 countries etc.

2. Indian foreign policy has effectively utilized this pandemic to establish her as a world leader.

3. India is trying to make itself significant in a number of ways such as distribution of paracetamol and hydroxychloroquine tablets to many countries.

4. India’s diplomacy extends from Iran to Russia and leads in SAARC as it has better medical facilities as compared to its neighbouring nations.

5. India can also involve itself in the capacity addition of health sector in African countries as India has done so in Nigeria, Ethiopia etc.

6. India has been vocal regarding the interests of developing economies during Covid-19.

Where multilateral institutions figure in?

1. This pandemic situation necessities cooperation and development.

2. Many multilateral institutions such as BRICS, ADB, WHO, G20, etc., are working to bring many countries together during the pandemic.

3. India has also received loans from the World Bank and IMF.

4. G 2O has become one of the primary forums for deciding most of the economic issues.

5. Role of the World Bank and IMF also becomes crucial because

a) It is working towards relief measures for some of the poorest countries of the world.

b) It aims to ensure that immediate liquidity in these countries in a coordinated manner.

c) There are no measures for protectionism or there is disruption in global supply chain.

d) It is contributing towards health of the people to counter Covid-19.

Which are the steps to be taken by India?

1. The global supply chain will be reordering themselves.

2. The European Union has suffered a lot because it used to rely on outside assistance for pharmaceuticals and so they would be looking forward to boost their health security.

3. Similarly, India has already built up its oil security and also should become the epicentre of supply chain running in the world.

4. So, India has to work towards this goal as a responsible nation in the global community to ensure an efficient supply chain to avoid disruption in its flow.

5. It should discuss migration and labour issues in a broader manner with countries.