Hikes in import duties will impact the welfare of Indian consumers: Cuts International
New Delhi, Feb 12 (KNN) The government has been raising tariffs, custom duties with the purpose of protecting the domestic industries and thus, it is becoming more inward-looking, instead of being more outward-looking, CUTS International has said.
Talking about the hikes in import duties, Pradeep S Mehta, Secretary General, CUTS International said if India wants to achieve the target of USD 5 trillion economy it must avoid being the leader of anti-dumping duties, undertake domestic reforms and prepare the domestic industries to face free and fair competition.
Finance Minister Nirmala Sitharaman presented the Budget FY 2020 on February 1. The statement comes in light of the imposition of higher duties on certain mobile phone parts and also changes in custom duties in several other sectors, such as whey powder, cheese, butter, ghee, butter oil etc.
Consumer Unity & Trust Society International has been a vocal proponent of liberalisation with safety nets and has regularly written about it in its quarterly Dossier titled “Competition Distortions in India”, which identifies policy decisions and issues in every quarter that have a positive or negative impact on market competition in India.
Arguing that global competition can generate value addition in the domestic manufacturing sector, Mehta further said that the Government should refrain from shielding the domestic industry and pitting the domestic manufacturers only against each other.
Mehta emphasised on the need to seek alternate approaches for empowering the domestic industry by providing support and inputs on accessing the factors of production viz. land, labour, capital and technology.
“Improvement on other issues like ease of running a business would go a long way in strengthening the economy instead of taking the protectionism route” stated Mehta.
Consumer Unity & Trust Society International is currently undertaking an extensive study across the manufacturing and services sectors on developing an ecosystem for good and better jobs in India.
Mehta further said that there is a need to shift the focus from protecting our industries to empowering and capacitating them to meet the government’s goal of ‘Make in India’, which will consequently result in good and better jobs.
While commenting on the hikes in import duties on various commodities in the same context, Mehta said that the move to remove anti-dumping duty (ADD) on Purified Terephthalic Acid was positive for improving competition in the domestic market, as the domestic textile industry had long been demanding for it. Unnecessary ADDs like these are often discussed in CUTS’s CDI quarterly.
“A move to impose or elevate duties will not only deter competition in India and impact the welfare of the Indian consumers, but will also be detrimental to India’s standing at the WTO” said Mehta. (KNN/SS)