'India may lift tariffs on imports', FM Sitharaman talks about safeguarding Indian companies

Union Finance Minister Nirmala Sitharaman, during an event in New Delhi, stated that India may consider reducing certain import taxes, ensuring that these adjustments do not adversely impact local businesses. This potential shift in trade policies comes in response to recent comments made by US president-elect Donald Trump, who criticised India for its high tariff rates. 

At an event, FM Sitharaman emphasized the need to safeguard Indian companies, indicating that she is open to revisiting tariffs on imports as long as it does not impede the country's manufacturing sector. She explained that every tariff imposed has a specific rationale and that her objective is to strike a balance between promoting domestic industry and facilitating international trade.

Sitharaman said the government can “lift tariffs” on imports, provided it does not hinder the nation’s manufacturing capability. “I have to balance the two,” she said.

During the Business Today MPW session in Mumbai last week, Commerce and Industry Minister Piyush Goyal expressed a willingness to consider lowering tariffs on Harley-Davidson motorcycles in response to a question. Goyal emphasised the importance of exploring ways to enhance trade relations between India and the US, noting that India is open to decreasing tariffs for products where there is no competition.

"Products where there is no competition. We don't manufacture heavy bikes like Harley-Davidson motorcycles. We won't have any problem in taking a request in this regard," Goyal said on Friday. 

“We are not worried about tariffs. If it's a tariff hike on China, it only helps India. If it's a tariff hike on everybody, we are all in the same boat. We will still continue to do well. But I personally believe India is looked upon as a trusted partner by the democratic world,” Goyal said.

In his first term as president, Donald Trump criticized India for its high tariffs, labeling the country as a "tariff king." In a recent interview in August, Trump reiterated his dissatisfaction with India's tax rates.

Despite India's traditional reluctance to lower tariffs on imported goods, Commerce Minister Goyal suggested that certain products, such as Harley-Davidson motorcycles without domestic alternatives, could potentially be reevaluated for tariff reductions.

The Trump administration has consistently advocated for the removal of trade barriers, particularly on goods manufactured in the US, with the high tariff on Harley-Davidson motorcycles being a contentious issue.

Goyal's remarks demonstrate India's practical approach to global trade, balancing its domestic interests with the goal of maintaining strong economic relations with international allies, including the US.

The US has emerged as India's leading trade partner, with bilateral trade reaching $119.7 billion in the most recent fiscal year, showcasing a growth of over 33% in just five years. Despite a widening trade deficit with India, the US continues to import a significant amount of Indian goods, reflecting India's robust export capabilities even amidst restrictive tariffs.

India's expanding footprint in the US market underscores its competitive advantage in various sectors and positions the country favorably to capitalise on evolving global supply chains and shifting trade policies.