‘Protectionism creates third class firms’

India has over-protected its companies from global competition in the past and if it continues to do so, it will end up creating third class companies, NITI Aayog CEO Amitabh Kant said on Tuesday.

“India has over-protected its companies, including auto companies for too long. Every time you open up India, it does extremely well. All these companies (that have faced global companies) have grown because we opened up to the rest of the world. If you keep protecting, you will create third class companies, this is my view,” Mr Kant said.

He was speaking at the launch of a the new programme in manufacturing and operations by the ISB here.

He said companies like the Tatas, Mahindras, Heros competed and they came as world champions because India let its economy to open up. “Don't protect, open them up to the rest of the world, they (companies) will go and capture the world,” he said.

The ex-bureaucrat said that this is not like the 19th century where one could deny to compete and become uncompetitive.