oppn parties Tariff Barriers: Return To Protectionism?

News Snippets

  • Delhi chief minister Arvind Kejriwal, referring to a spate of FIRs for putting up posters in Delhi which said "Modi Hatao, Desh Bachao", said that even the British did not act in such manner
  • The 2023-24 Appropriation BIll, which allows the government to spend Rs 45 lakh crore in the fiscal, was passed by Lok Sabha in 9 minutes without any discussion
  • Sources say that Amritpal Singh fled to Haryana and may now be in Uttarakhand
  • Experts say that Rahul Gandhi's disqualification from Parliament will kick in immediately as the conviction has not been stayed
  • Tatas to invest $2bn in super app Tata Neu
  • Chief Economic Advisor V Anantha Nageswaran has said that inflation will drop as commodity and food prices have fallen
  • Government will define quality norms to ensure better 5G service
  • Stocks tumble again on Thursday after two sessions of recovery: Sensex loses 289 points to 57925 and Nifty goes down by 75 points to 17076
  • Amicus curiae and senior advocate K V Vishwanathan has told the Supreme Court that the changes made in law and three extensions given to the present director of Enforcement Directorate are illegal and will imperil the integrity of the agency
  • Supreme Court says it cannot judicially direct the government to acquire land or buildings near the court for advocates' chambers
  • ISSF Cup shooting: Indian pair of Rhythm Sangwan and Varun Tomar win silver in 10m sir rifle mixed team event
  • WPL: UP Warriorz take on Mumbai Indians in the Eliminator today. The winner will play Delhi Capitals in the finals
  • World Boxing: Four Indians - Nikhat Zareen, Nitu Ghanghas, Lovelina Borgohain and Saweety Boora - enter the frinals in their respective category
  • Bombay HC imposes costs and dismisses a petition by a housing society that sought to have a community-wise cap on residents
  • Delhi Police files 159 FIRs for defacement of public property and 49 for posters saying 'Modi Hatao Desh Bachao'
Rahul Gandhi disqualified from Parliament, Wayanad Lok Sabha seat declared vacant
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.