A trade policy for Viksit Bharat: Let’s reduce tariffs and rethink pacts

livemint.com:

The budget speech gave pride of place to the long-term goal of Viksit Bharat and also said that reforms in many areas would be needed to achieve it. This article focuses on one of those areas: trade policy. Policies should be tailored to specified targets, and in this respect, commerce minister Piyush Goyal has set an ambitious target.

Exports of goods and services must rise from $775 billion in 2023-24 to $2 trillion by 2030. This implies a growth rate of over 14 % in nominal US dollars. This is three times faster than the IMF projection of global exports of goods and services in the same period.

The trade policy we need to achieve this target requires resolving some internal differences and also evolving a new approach to handling the global environment we now face. Resolve internal differences: The key difference arises from the impression in some quarters that ‘atmanirbharta’ or self-reliance implies increased protection for domestic production to reduce imports. To be fair, the government has denied subscribing to this view.

But protectionism is on the rise everywhere, often covertly supported by business interests, and it is no surprise if this is also happening in India. Perceptions that the government favoured protectionism surfaced in 2017, when import duties were raised on several items, reversing a policy of gradual reduction of duties that all previous governments had followed until then. It was reinforced when duties were raised in subsequent years.