India is poised to reduce tariffs on various items, including high-tariff products such as cars, whiskey, and machinery, marking a shift away from treating tariffs as a significant revenue source during free trade agreement (FTA) negotiations, according to a government official. The move comes as part of FTA negotiations with developed economies such as the UK, the European Union, Australia, and Oman. The government is considering a more strategic approach, acknowledging that tariffs should not be the primary basis for accessing FTAs. The objective is to promote economic growth and free movement of goods and services, with revenue as a secondary consideration. Currently, India has one of the highest average import duties globally. The shift in strategy is expected to align with global trends of reducing tariff barriers and integrating into global value chains through FTAs. The move towards a more open economy will be gradual, emphasizing competition, quality, and consumer benefits over protectionism.
Politics Import Duties No Longer a Primary Revenue Source in FTA Negotiations, Says Official