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

News Snippets

  • Media person Rajat Sharma resigns as DDCA president
  • Shiv Sena, NCP and Congress postpone meeting the governor of Maharashtra
  • Shiv Sena not to attend the NDA meeting on 17th November, says break up "a formality"
  • Shiv Sena says that the confidence the BJP is showing about forming the government in Maharashtra is based purely on its expectation of getting numbers through horse trading
  • Anil Ambani resigns as director of the bankrupt Reliance Communications
  • India beat Bangladesh by an innings and 150 rums inside three days in the first Test. Indian pacers excel after Mayank Agarwal's double century
  • Sena-NCP-Congress work out a common minimum programme, will form the government soon and it will last 5 years, says Sharad Pawar
  • Income Tax Appellate Tribunal upholds the decision to withdraw the charitable status of Young India, making it liable to pay Rs 145 in income tax. Rahul Gandhi and Priyanka Vadra are the majority shareholders in the company
  • CBI raids offices of Amnesty International across India
  • Supreme Court quashes NCLAT order against Arcelor Mittal and paves the way for the company to take over ailing Essar Steel
  • Finance Minister Nirmala Sitharaman says concerns of telcos will be addressed and no company will close down
  • Government thinking of providing higher insurance coverage on bank deposits
  • Mayank Agarwal scores a double century as India take firm grip on the first Test versus Bangladesh
  • Supreme Court warns Rahul Gandhi to be more careful in future but drops contempt proceedings in the "chor" case
  • In a flip-flop, Vodafone CEO says sorry to the government, sys no plan to exit India
Supreme Court dismisses plea for review in Rafale case, says no need for roving inquiry, maintains clean chit to government
oppn parties
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.