India tilts toward trade protectionism in hiking tariffs, hurting own consumers

28/09/2018 12:00 - 457 Views

India on Thursday began hiking import tariffs on 19 "non-essential items," a move that experts said could hurt its consumers as well as Chinese and South Korean enterprises.

The decision runs counter to trade liberalization and facilitation, they noted.

The new tariff list includes items such as air conditioners, refrigerators, footwear, speakers, luggage and jet fuel, according to a notice from India's finance ministry.

Tariffs on those products were raised by as much as 10 percentage points, according to the notice.

"India's use of tariffs to curb the imports of these 19 items could mainly hit Chinese and South Korean companies," said Bai Ming, deputy director of the Ministry of Commerce's International Market Research Institute.

"China manufactures some of the high-end washing machines, refrigerators and air conditioners sold in India," Bai told the Global Times on Thursday, adding that the move is against global free trade.

"India is making a further tilt toward protectionism, which runs counter to trade liberalization and facilitation," Bai added.

"The move is part of India's effort to tackle its widening current account deficit and guard against a sharp slide in the rupee," Liu Xiaoxue, an associate research fellow at the Chinese Academy of Social Sciences' National Institute of International Strategy, told the Global Times on Thursday. 

The rupee has weakened by more than 12 percent since the beginning of this year and has become one of Asia's worst preforming currency, according to Reuters.

But experts said that increased tariffs on such products might hurt Indian consumers more.

"Given (the tariffs are) on all foreign producers, the host country's customers will actually be hurt more," Liu said. "These items are called non-essential, but they look more like daily necessities."

"As India's largest source of imports, China's products sold in the country cover most categories. The move will have a negative impact on Chinese companies, but will not be too bad, given the scale of the tariff hike," Liu said.
September 28, 2018
Source: Global Times
 
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