India Inc push to hike tariffs raises questions on country's competitive edge: DPIIT's Bhatia

Amardeep Singh Bhatia Secretary, Department for Promotion of Industry and Internal Trade

Repeated push from the industry to hike tariffs needs to be questioned at a time when the country is looking to integrate with global supply chains aided by a competitive duty regime, according to Amardeep Singh Bhatia, secretary to the Department for Promotion of Industry and Internal Trade.

"On the export markets side and integration with the supply chains, a lot of work has been done in terms of reduction in tariffs. The weighted tariff has come come down substantially and is almost at the world average level. There are pressures to increase it by the domestic industry and need to look at why these requests keep coming up and why are we not competitive enough," Bhatia raised the issue at an event on December 11.

His comments come at a time when the upcoming Donald Trump regime in the US is set to raise tariffs on several countries to address socio-economic and political issues. The US president-elect last month announced that he will sign an executive order on January 20 targeted at three of his country's largest trading partners, imposing 25 percent additional tariffs on all imports from Canada and Mexico and an additional 10 percent on inbound shipments from China.

Trump has also threatened 100-percent tariffs on BRICS nations, which includes India, to counter what he sees as attempts towards de-dollarisation.

Bhatia's predecessor Rajesh Kumar Singh too had asked India's domestic industry to prepare themselves for a lower tariff regime in the long run as the country looks at signing more foreign trade agreements (FTAs).

The DPIIT Secretary added that government is working on sector-specific interventions to deepen the startup movement in the country. "Around 45 percent of our startups are coming from tier II and tier III cities. This is an encouraging trend," he said.