Nor is it clear that the international environment is welcoming. In a phone interview, Vivek Dehejia, a trade economist at Ottawa’s Carleton University, points out that India couldn’t reach trade agreements with the U.S. and the European Union even before trade became an explosive domestic issue in the West. Fraught relations with China and India’s rejection of RCEP affect India’s access to Asia’s largest markets as well. In many cases, India’s domestic market is too small to count. It needs to create a more stable regulatory environment, end “tax terrorism” by officials, and upgrade infrastructure to become competitive as an export hub.
“You can try and race an Ambassador car on a Formula One racetrack,” Mr. Dehejia says. “But you’re going to have to get incredibly lucky to make it work.”
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