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

News Snippets

  • Last date for filing Income Tax returns by salaried employees extended to August 31
  • Supreme Court extends Assam NRC deadline to August 31
  • Prohibitory orders clamped in Bengaluru. Wine shops, pubs, bars and restaurants ordered closed for the next 48 hours
  • Congress still trying to avoid the floor test in Karnataka
  • 75 percent of the jobs in all private sector firms to be reserved for locals in Andhra Pradesh
  • Supreme Court will hear the petition of two independent MLAs seeking a direction to the Karnataka Speaker to hold the trust vote "forthwith"
  • Congress-JD(S) and a partisan Speaker push the Karnataka trust vote to Tuesday
  • Panel submits draft legislation to the government to criminalize mining, investing and trading of crypto-currencies
  • Government panel suggest a ban on crypto-currencies
  • Lok Sabha passes RTI Act amendment bill amid protests by the Opposition
  • Jasprit Bumrah rested for ODIs and T20s
  • Dinesh Kartik ignored across fromats
  • Rohit Sharma included in Test team too while Wriddhiman Saha makes a comeback after injury
  • Virat Kohli retained as captain across formats for the West Indies tour
  • MS Dhoni decides to take a two-month break, will skip West Indies tour but will not retire
Congress-JD(S) government loses trust vote in Karnataka. BJP might stake claim to form the government
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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.