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Expressing concern over "increasing protectionist tendencies in the developed world", Union Finance Minister Arun Jaitley on Thursday warned that growing populist backlash against globalisation and free trade can have an adverse impact on the global economy.
"If developing countries see a trend of protectionism, the spillover impact on the policies in other parts of the world would be adverse," Jaitley said while delivering the keynote address at a BRICS seminar on "Investment Flows: Challenges, Opportunities and Road Ahead" here.
In this context, he termed Britain's vote to leave the European Union and the aggressive criticism of trade deals in the ongoing US Presidential election debates "as worrisome developments".
"The tenor of the debate is more protectionist during elections and much less when you get back to business as usual," Jaitley said, expressing the hope that apprehensions about free trade would subside once the US elections are over.
He said an aggressive push to domestic reforms can neutralise the impact of the ongoing global slowdown to a considerable extent.
Owing to many policy changes, the ease of doing business in India has improved massively in the recent years, and many sectors have now been brought under the automatic approbate route.
"Over the last two-and-half years, most of the sectors have been reviewed and we now have probably the most open FDI policy in the world, with 90 per cent FDI coming through the automatic route," Jaitley pointed out.
He further said: "India's ranking in the ease of doing business and also in the global competitiveness index has moved up significantly in the last few years...aided by a large number of policy initiatives, which have been undertaken by the government."
On BRICS, he said the concept has taken a concrete shape and the areas of cooperation among the member-nations are ever increasing.
"We now have a BRICS institution in the form of the New Development Bank, and in a remarkably short period of time, it has initiated its own projects, which it is financing. A contingency reserves arrangement is in place now and there is going to be increased cooperation in the area of customs and taxation," Jaitley explained.
Speaking on the occasion, Reserve Bank of India Governor Urjit Patel said BRICS must work on improving business environment, while SEBI Chairman U.K. Sinha urged the establishment of more institutions like the New Development Bank.
Thursday's summit was part of run-up to the upcoming "8th BRICS Summit" in Goa on October 15-16 on the theme of "Building Responsive, Inclusive & Collective Solutions".
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)