Protectionist Trade Isn’t a Short-Term Thing: Anand Mahindra

Anand Mahindra said 2019 is expected to be a better year for business than 2018 at the World Economic Forum in Davos

File image of Anand Mahindra.

(Photo: IANS)

Mahindra Group Chairman Anand Mahindra has raised concerns that the “protectionist” spell in global trade is far from being over.

Speaking to BloombergQuint on the sidelines of the World Economic Forum (WEF) in Davos, he said, “We don’t know how long this protectionist, nationalist thrust may last. I personally don’t think it will be a short-term phenomenon.”

He however said that companies should go local in order to deal with protectionism, asserting that there is “enormous dividend” in going local.

Elaborating further on why economies are becoming increasingly protectionist, Mahindra said, “Usually when people feel pain, even if that pain comes from change in jobs due to digitisation, which has nothing to do with globalisation, but when that happens the fall guy is usually the overseas business. The finger is always going to point, there will always be some pushback on companies that haven't gone truly local.”

Looking back on the past year he said that 2018 was a disappointing year for the markets. “The festival season belied our expectations. There was (repo) rate hike, weak monsoon, state elections. At the end, it all translates to poor sentiment,” he said.

He however said that 2019 is expected to be a better year for auto business. “We are hoping that the sentiment will revive this year. I am a great believer that there is huge pent up demand waiting to come out,” he said.

The auto magnate refused to comment decisively when asked about the political situation of the country. “I don’t get paid by shareholders to make political comments. As long as I have a job, I will not be provocative for no reason,” he said.