NEW DELHI: Finance minister Nirmala Sitharaman on Tuesday indicated that govt may lift some tariffs if they don’t hurt domestic companies, asserting that there is a need to balance the interest of firms which need imported inputs as well those who are producing in the country.
At an event organised by a news channel, Sitharaman said it was possible to explain every tariff that has been levied and these were not imposed to control imports.
“Do we have a moral authority to kill or nip in the bud those who are growing in India and who can produce in India? I need to give them that protection as well as I have to encourage industries which need those imports,” Sitharaman said, while responding to a question on the US president-elect Donald Trump’s proposed tariff policy.
Trump, who has campaigned on the issue of America First, had identified India as a “big import tariff charger”. In Sept, he described India as a “very big (trade) abuser”, bracketing it and Brazil just one notch below China. There are apprehensions that several exports from India to the US from sectors such as textiles, automobiles and pharmaceuticals could face high tariffs if Trump imposes reciprocal tariffs and make Indian goods uncompetitive in the US market.
“Imports are required, intermediary goods are required to be imported. I will have to encourage that. I will lift the tariffs on them provided it doesn’t – intended or unintended – hurt my own capacity to produce. I will have to balance the two,” Sitharaman said.
In the 2024-25 Budget, the FM had cut the basic customs duty on mobile phones, chargers and mobile printed circuit board assembly from 20% to 15%, stating that with a three-fold increase in domestic production and almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry had matured and asserted that the cut in import tariff was in the interest of consumers.
Global agencies such as the IMF and the World Bank have pointed to India’s tariffs, saying there is a need to bring them down.
The FM also said that India needs foreign direct investment but “need to make sure who exactly is bringing in that FDI.” and made it clear that while New Delhi welcomes FDI there has to be transparency on the source.
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