oppn parties Tariff Barriers: Return To Protectionism?

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  • Supreme Court dismisses industry bodies' plea to stop the SBI from disclosing the numbers of the electoral bonds
  • NDA finalizes seat sharing in Bihar - BJP 17, JD(U) 16 aqnd LJP 5
  • Election Commission removes Home secretaries of Gujarat, UP, Bihar, HP, Uttarakhand and Jharkhand and the DGP of Bengal
  • Telangana governor Tamilsai Soundararajan resigned from his post and is likely to contest for the BJP from Chennai
  • ED claims K Kavitha of the BRS paid Kejriwal and Sisodia Rs 100cr in the alleged liquor scam in Delhi. AAP says this is a ploy to malign their names
  • Supreme Court tells SBI not to be selective and disclose full details of electoral bonds
  • With the US Department of Justice rpobing bribery charges against Adani group companies, Adani group shares and bonds are under pressure
  • Narayan Murthy gifts Infosys shares worth Rs 240cr to his 4-month-old grandson
  • Tata Sons to sell Rs 9362cr worth shares of TCS to pare debt
  • Stocks were positive on Monday - Sesex climbed 104 points to 72748 and Nifty 32 points to 22055
  • IOA dissolves the ad-hoc panel and gives full control of WFI to elected panel headed by Brij Bhushan aide Sanjay Singh
  • Controversy erupts after BJP leader Tathagata Roy prescribes the cicumcision test for those seeking citizenship under CAA. TMC calls it a 'vulgar jibe'
  • Rahul Gandhi concludes his Bharat Jodo Nyay Yatra in Mumbai, holds a mega rally at Shivaji Park and says the BJP does not have the courage to change the Constitution despite making a lot of noise in that regard
  • ED issues two fresh summons to Delhi CM Arvind Kejriwal in the liqour excise case just a day after he got bail in the earlier cases of ignoring the summons
  • A 14-year-old girl killed herself after she was strip-searched at school in Bagalkot in Karnataka
Election Commission orders removal of home secretaries of 6 states and the DGP of Bengal
oppn parties
Tariff Barriers: Return To Protectionism?

By Sunil Garodia
First publised on 2022-12-21 10:50:47

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.

The Centre has proposed to raise import duties on non-essential items. There can be no argument over this. If Indians can live without some non-essential, luxury items but are yet willing to import them they should be ready to pay a higher price for them. But the dispute is over the definition of non-essential. In the latest proposal, non-essential items have been sought to be defined as items for which "adequate domestic manufacturing capacity" exists. In other words, if an item is being produced in India and if it is being produced in quantities sufficient enough to address the demand for that item, than for the purpose of the latest proposal that item will be considered non-essential and imports of such items will carry a higher import duty.

The government proposes to identify such 'non-essential' items through a 'granular' assessment by individual ministries who will then make a list of items that are being manufactured in the country but are still being imported. It will not be assessed whether these items manufactured in India are of the same quality or value. Just the fact that they are being produced in India and still being imported will be enough for the imported items to carry higher duty.

If the idea is to protect domestic industry by higher import tariffs then this move is not good. There are two parallel ideas being promoted by the government. The first is Make in India and the second is Atmanirbhar Bharat. Both have noble intent. But if tariff barriers are erected, it will work to our disadvantage. The country should only produce items which it can do best and at the optimum cost. It will then be competitive and will be able to export those items. Items which it cannot produce well (in terms of quality and pricing) should be allowed to be imported.  Make in India will only succeed when we work on our strengths and true atmanirbhata is not in being self-reliant in all things but in things which we can produce well and export to the world. The rest we can import at lower costs. We can then divert the capital and infrastructure used for making these 'non-essential' items to more productive uses. That would work to the best of our advantage. It has to be admitted that no country in the world will ever be able to produce all it needs locally. That is why import barriers, except in cases of obvious dumping by other countries, are disadvantageous for global trade.