India should substantially reduce tariffs & if need be depreciate the rupee: Montek Singh Ahluwalia, former Deputy Chairman, Planning Commission, to Karan Thapar for The Wire.
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In an interview to discuss how India should respond to the Trump tariffs, Montek Singh Ahluwalia has said India should substantially reduce its tariffs, effectively across the board with the exception of some areas of agriculture, and, if need be, reduce the exchange rate of the rupee.
In a 30-minute interview to Karan Thapar for The Wire, Montek Singh Ahluwalia, the former Deputy Chairman of the Planning Commission, said India now has the self-confidence to be able to compete and does not need protection or aatmanirbharta to protect itself.
However, there are areas of agriculture where Mr. Ahluwalia accepted that levels of protection are necessary and he also accepted that India needs to be careful about permitting or easily allowing security sensitive imports from China. He also believes that India, like many other countries, needs to be concerned about the possibility that China may, in the new Trump world, seek to dump its excess capacity production on India. But with these two exceptions Mr. Ahluwalia strongly advocated a substantial reduction in tariffs.
Mr. Ahluwalia also said that industries that are not fully competitive could be protected by a small or commensurate reduction in the exchange rate.
I will stop there. There’s a lot in this interview you should see and hear for yourself and I don’t want to run the risk of incorrectly paraphrasing or presenting in precis Mr. Ahluwalia’s views. He’s spoken clearly and precisely and his arguement is easy to follow and understand.
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