oppn parties Tariff Barriers: Don't Go Back In Time

News Snippets

  • All 6 Bahujan Samaj Party MLAs merge with the Congress in Rajasthan
  • Bengal CM Mamata Banerjee to meet PM Modi on Wednesday, state issues on the agenda
  • Pakistan to open Kartarpur corridor on Nov 9
  • Rajeev Kumar, ex-police commissioner of Kolkata and wanted for questioning in the Sarada scam does not appear before the CBI despite the state administration requesting him to do so
  • Supreme Court asks the Centre to restore normalcy in J&K but keeping national interest in mind
  • As Trump accepts the invitation to attend a programme in Houston with PM Modi, India rushes to settle trade issues with US
  • After drone attack on Aramco's Suadi Arabia facility, oil prices jump 19% in intra-day trading causing worries for India
  • Imran Khan raises nuclear war bogey again, says if Pakistan loses a conventional war, it might fight till the end with its nuclear arsenal
  • Searching for Rajeev Kumar, ex-CP, Kolkata Police, the CBI approaches state DGP to know about his whereabouts
  • Ferry overturns in the river Godavari in Andhra. 46 feared dead
  • Supreme Court to hear pleas on Jammu & Kashmir today
  • Ghulam Nabi Azad moves Supreme Court for ordering the government to allow him to visit his family in J&K
  • GST Council meeting to focus on leakages and evasions, expected to tighten processes, especially regarding input tax credit
  • Finance minister, citing figures for July 2019, says that industrial production and fixed investment is showing signs of revival
  • Amit Shah's comment on Hindi as the unifying language draws the ire of MK Stalin and Siddaramaiah. Stalin says the country is India not Hindia
Sunni Wakf Board and Nirvani Akhara write to the Supreme Court for a negotiated settlement to the Ayodhya dispute
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Tariff Barriers: Don't Go Back In Time

By A Special Correspondent

Is it good for India to be misguided by some other nations and put up tariff barriers or root for import substitution to shore up manufacturing in the country? The record of the last three decades, when the Indian economy has prospered the most, doesn’t suggest that it is the best way. After controls were removed from 1991, the openness and removal of restrictions gave a huge boost to the economy. Globalization and its attendant benefits ensured that India grew at a fast pace.

But the Narendra Modi government is taking India back in time when controls and restrictions ruled and entrepreneurship was a difficult task. Maybe to make a success of ‘Make in India’ or maybe under pressure from the Swadeshi lobby in the RSS, the government is working on import substitution while simultaneously raising tariffs on a host of imported products. While no one can object if tariff is raised on products that are being dumped by other countries and are harming local units (like it was done for steel products when China started dumping cheap steel in India), Indian industry cannot be protected by higher tariffs per se.

The government must recognize that the best way for ‘Make in India” is to remove entry barriers, reduce tariffs and work on ease of doing business to make manufacturing in India an attractive and monetarily viable option for foreign producers who sell their products here. This cannot be done if tariff or non-tariff barriers are put in place. Import substitution with low standard Indian products is not going to work. If reforms are not pushed through and entry barriers remain, technology transfer for producing optimally will not happen. Unless that happens, Indian manufacturing will not be competitive and the end-consumer will suffer.