“Bilateral trade tensions among major trading blocs have intensified, leading to an imposition of rising tariffs and sanctions,” Tractors and Farm Equipment Ltd chairperson Mallika Srinivasan said at the B20 inception conference here. “The outbreak of the recent military conflict led to a variety of restrictive measures, which significantly impacted global supply chains.”
The Business 20 (B20) is the official G20 dialogue forum with the global business community. It is among the most prominent engagement groups in the G20, with companies and business organisations as participants.
Srinivasan said restrictive trade and investment policies have also impacted foreign direct investment (FDI) activity and the global undercurrents are also having second order effects, leading to disrupted production, higher prices for consumers, limited consumer choices, misallocation of resources and loss of jobs. “We are now at a point where formal trade restrictions are estimated to impact $1.4 trillion of trade among G20 countries,” she said.
While global value chains (GVCs) do allow best value for goods and services, they are also prone to disruptions. “We have experienced the case of semiconductors during Covid-19 and many more such sectors and products were affected,” said Vir S Advani, vice chairman of Blue Star Ltd.
He said the issue of mobility restrictions and various government policies affected the networks of complex production-sharing. “We must look for structures, processes and technologies which are resilient for businesses. Promoting regional trading arrangements (RTAs) is a possible way to strengthen GVCs,” Advani said.
ITC chairman Sanjiv Puri called for collective efforts in the G20 and global community to come together to find solutions for a sustainable future. “The fact that the world has to transition to net zero, the fact that the world needs to move to a more sustainable and greener future is well acknowledged and understood,” Puri said at the meeting organised by the Confederation of Indian Industry.
(The reporter is in Gandhinagar at the invitation of CII)
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