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<div class="itg-mosimage"><amp-img src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998April%2Ftoo-less-1_083012092353.jpg" alt="" height="425" width="650" class="" layout="responsive"></amp-img>Yashwant Sinha<p>In the competitive regime of global trade, most countries are eager to protect their turf. But India is an island of selflessness, specially when it comes to customs duties. The flattening bottom lines and factories running below capacity are a testimony to a country that perhaps went a bit too far on the issue of lowering tariff barriers.</p><p>Former finance ministers Manmohan Singh and P. Chidambaram were eager to push India on the path of globalisation and to catch up with the then economically vibrant South-east Asian countries, now under a currency collapse. </p><p>Internal trade reforms, however, were not pushed before tariff barriers were substantially lowered much beyond India's commitment to the World Trade Organisation (WTO). Consequently, it has left the industry exposed to unsustainable competition from cheap imports. Some examples:<br></p><ul><li><table><tbody><tr><td><b>"The UF government went too fast. My bottomline will suffer."</b><br><b>Arvind Pande CMD,</b> <i>SAIL</i><br><br><b>"We have been crying hoarse but no one's listening."</b><br><b>R.K.D. Shah CMD,</b> <i>BHEL<br></i></td></tr></tbody></table>Imports in dollar terms for the period April to December last year registered a growth rate of 7.7 per cent, up from 4.1 per cent during the corresponding period the previous year. This happened even though industry had slowed down and imports had become more expensive with the rupee losing its value against the dollar. An indication that imports were landing not because of higher demand. The sectors that witnessed substantial increase in imports were: inorganic and organic chemicals, electrical machinery, iron and steel, primary steel, pig iron-based items and medicinal and pharmaceutical products. And it is the manufacturers in these sectors who are today complaining of being adversely affected.<br></li><li>Arvind Pande, chairman-cum-managing director (CMD) of the public-sector Steel Authority of India Limited (SAIL), says Chidambaram's move to reduce the import duty on hot-rolled steel coils from 30 per cent to 25 per cent "will affect my bottom line this year". Though imports were not high in terms of quantum, goods were being "dumped" in India at prices less by Rs 1,000 a tonne. SAIL had to slash its selling prices by an equal amount. Pande has put off, by at least a year, plans to construct a mill in Durgapur to make downstream products and modernise the cold-rolled steel mills of Bokaro and Rourkela.<br></li><li>Larsen & Toubro, the construction giant, was expecting Rs 2,000 crore worth of orders for supplies to refineries. But with the zero-duty provision on imports for infrastructure and related sectors, the orders passed them by. It was the same with Bharat Heavy Electricals Ltd (BHEL), which saw a business loss of 20 per cent. Says CMD R.K.D. Shah: "We have been crying hoarse but no one's listening."<br></li></ul><div class="itg-mosimage"><amp-img src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998April%2Ftoo-less-2_083012092353.jpg" alt="" height="425" width="650" class="" layout="responsive"></amp-img>Ramakrishna Hegde: walking the tightrope on import policy</div></p><p>The sharp cut in import duties affected bottom lines, forced a postponement of investment and aggravated a slowdown that was already underway. In some instances, the skewed approach to lowering tariffs is bound to have a longterm bearing.</p><p>In the case of bulk drugs, the base for medicinal formulations, fresh investments dried up as sharp duty cuts began three years ago. The share of imports in bulk drugs increased from 28 per cent-30 per cent then to about 40 per cent. </p><p>"What went wrong is that globalisation preceded internal liberalisation," says Dilip G. Shah, chief executive of the Vision Consulting Group, which specialises in public policy and strategic planning. "So domestic manufacturers are getting hit and there is no real incentive to invest." </p><div class="itemcenter"><amp-iframe height="62" title="" width="320" sandbox="allow-forms allow-scripts allow-same-origin allow-popups allow-top-navigation allow-top-navigation-by-user-activation" allowfullscreen src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Findiatoday%2Fbanner%2Fpreferred-source-new.html%3Fv%3D1.014%5Cu0026native%3D1" class="mrBt15 preferred-source-banner"> </amp-iframe></div><div class="itg-mosimage"><amp-img src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998April%2Ftoo-less-3-s_083012092402.jpg" alt="" height="425" width="650" class="" layout="responsive"></amp-img><div class="clicktoenlarge"><a href="#" target="_blank" rel="dofollow">Click here to Enlarge</a></div></div></p><p>Correcting the anomalies will pose a tough challenge for the new Government. It has promised a review for now. Finance Minister Yashwant Sinha told INDIA TODAY last week: "I will address these issues in my regular budget." Prebudget industrial lobbying has begun to ensure there will be changes in the tariff structure. There are many tricky issues for the Government to handle.<br></p><p>Under the WTO agreement, India has time till March 2000 to reduce its duties (as they existed in 1990-91) to a third. But it has already gone substantially beyond in many product categories. Of the 5,000-odd items, 4,300 are industrial. Existing tariffs on most of these items are substantially lower than even the final committed rate. But is raising revenue really an alternative?<br></p><p>Further, local manufacturers have to pay sales tax as well as octroi which inflate costs and erode India's competitiveness by 5 per cent-14 per cent. Importers do not pay any such tax. In many cases, duties on inputs are much higher than on the finished products. </p><p>Consequently, it makes sense to import finished products rather than to manufacture them locally. And that compounds the input producer's suffering. For instance, textile machinery and intermediates attract 20 per cent basic duty while raw materials such as some steel tools carry 30 per cent duty.<br></p><table><tbody><tr><td><div align="center"><b>Reeling under imports</b><br></div><div align="center">Aberrations in tariff structure have affected fortunes in many sectors.<br></div><div align="center"> </div><div align="center"><b>Sugar</b><br></div><b>POLICY:</b> Duty down to 0 per cent from March '94. No change so far.<br><b>IMPACT:</b> Despite a stock of 10 MT, imports continue to depress margins for manufacturers. Payments to farmers are getting delayed.<br><div align="center"><b>Capital Goods</b><br></div><b>POLICY:</b> Imports at zero duty for infrastructure and refinery sectors.<br><b>IMPACT:</b> Domestic players have lost out on orders. BHEL has lost Rs 700 crore-Rs 800 crore worth of business in the past one year.<br><div align="center"><b>Hot Rolled Steel Coils</b><br></div><b>POLICY:</b> Tariff reduced from 30 per cent last year to 25 per cent now.<br><b>IMPACT:</b> Made India more attractive for dumping. Put pressure on local selling prices, affected manufacturers' profitability.<br><div align="center"><b>DMT/PTA<br></b></div><b>POLICY:</b> Duty at 25 per cent since '96.<br><b>IMPACT:</b> Dumping. The Anti-dumping Authority has recommended imposition of final duties, but it is still to be implemented.<br><div align="center"><b>Paper Boards<br></b></div><b>POLICY:</b> Duty reduced from 65 per cent earlier to 20 per cent in '96.<br><b>IMPACT:</b> Affected investment sentiments. Imports depressed prices. ITC Bhadrachalam expects losses this year.<br></td></tr></tbody></table></p><p>With free-falling import duties, India has also became one of the favourite grounds for dumping. In 1994, only two items were being dumped: PVC resin, a rubber substitute, and bisphenol A, an organic chemical. </p><p>Today, the number of items has gone up to nine. They include newsprint, PTA and graphite electrodes (used in the steel industry). </p><p>Commerce Minister Ramakrishna Hegde will have to strengthen the anti-dumping policy.<br></p><p>The BJP's dexterity will be put to the test in its handling of such sensitive issues, without giving the signal of turning protectionist. That calls for a deft tightrope walk on policy. </p><p>If India should go global - which it must - the approach road should be first paved with an internal liberalisation of the trading system. </p><p>Europe reformed its markets and currencies internally before it sought to build a common market. India too cannot afford to have a regime of borderless trade dropped on it overnight.<br></p><div id="tab-link-wrapper-plugin"><div class="authors__container"><div class="authors__by"><div class="authlable">Published By: </div><div class="authdetaisl">AtMigration </div></div><div class="published__on"><div class="authlable">Published On: </div><div class="authdetaisl">Apr 13, 1998</div></div></div><div class="sendros">--- ENDS ---</div></div></div>

economy

Economy

<div class="itg-mosimage"><div class="itgimage"><img  title=""  class="" alt="" src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998April%2Ftoo-less-1_083012092353.jpg" loading="lazy" /></div>Yashwant Sinha<p>In the competitive regime of global trade, most countries are eager to protect their turf. But India is an island of selflessness, specially when it comes to customs duties. The flattening bottom lines and factories running below capacity are a testimony to a country that perhaps went a bit too far on the issue of lowering tariff barriers.</p><p>Former finance ministers Manmohan Singh and P. Chidambaram were eager to push India on the path of globalisation and to catch up with the then economically vibrant South-east Asian countries, now under a currency collapse. </p><p>Internal trade reforms, however, were not pushed before tariff barriers were substantially lowered much beyond India's commitment to the World Trade Organisation (WTO). Consequently, it has left the industry exposed to unsustainable competition from cheap imports. Some examples:<br></p><ul><li><table class="mceVisualAid" style="margin-left: 8px; background-color: rgb(229, 229, 229);" align="right" border="0" cellpadding="3" cellspacing="3" height="100" width="231"><tbody><tr><td class="mceVisualAid"><b style="color: rgb(204, 0, 0);">"The UF government went too fast. My bottomline will suffer."</b><br><b>Arvind Pande CMD,</b> <i>SAIL</i><br><br><b style="color: rgb(204, 0, 0);">"We have been crying hoarse but no one's listening."</b><br><b>R.K.D. Shah CMD,</b> <i>BHEL<br></i></td></tr></tbody></table>Imports in dollar terms for the period April to December last year registered a growth rate of 7.7 per cent, up from 4.1 per cent during the corresponding period the previous year. This happened even though industry had slowed down and imports had become more expensive with the rupee losing its value against the dollar. An indication that imports were landing not because of higher demand. The sectors that witnessed substantial increase in imports were: inorganic and organic chemicals, electrical machinery, iron and steel, primary steel, pig iron-based items and medicinal and pharmaceutical products. And it is the manufacturers in these sectors who are today complaining of being adversely affected.<br></li><li>Arvind Pande, chairman-cum-managing director (CMD) of the public-sector Steel Authority of India Limited (SAIL), says Chidambaram's move to reduce the import duty on hot-rolled steel coils from 30 per cent to 25 per cent "will affect my bottom line this year". Though imports were not high in terms of quantum, goods were being "dumped" in India at prices less by Rs 1,000 a tonne. SAIL had to slash its selling prices by an equal amount. Pande has put off, by at least a year, plans to construct a mill in Durgapur to make downstream products and modernise the cold-rolled steel mills of Bokaro and Rourkela.<br></li><li>Larsen & Toubro, the construction giant, was expecting Rs 2,000 crore worth of orders for supplies to refineries. But with the zero-duty provision on imports for infrastructure and related sectors, the orders passed them by. It was the same with Bharat Heavy Electricals Ltd (BHEL), which saw a business loss of 20 per cent. Says CMD R.K.D. Shah: "We have been crying hoarse but no one's listening."<br></li></ul><div class="itg-mosimage"><div class="itgimage"><img  title=""  class="" alt="" src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998April%2Ftoo-less-2_083012092353.jpg" loading="lazy" /></div>Ramakrishna Hegde: walking the tightrope on import policy</div></p><p>The sharp cut in import duties affected bottom lines, forced a postponement of investment and aggravated a slowdown that was already underway. In some instances, the skewed approach to lowering tariffs is bound to have a longterm bearing.</p><p>In the case of bulk drugs, the base for medicinal formulations, fresh investments dried up as sharp duty cuts began three years ago. The share of imports in bulk drugs increased from 28 per cent-30 per cent then to about 40 per cent. </p><p>"What went wrong is that globalisation preceded internal liberalisation," says Dilip G. Shah, chief executive of the Vision Consulting Group, which specialises in public policy and strategic planning. "So domestic manufacturers are getting hit and there is no real incentive to invest." </p><div class="itemcenter"><iframe scrolling="no" allowfullscreen="" frameborder="0" width="100%" height="62" awidth="320" aheight="62" amplayout="fixed" src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Findiatoday%2Fbanner%2Fpreferred-source-new.html%3Fv%3D1.014" class="preferred-source-banner" loading="lazy"></iframe></div><style>.preferred-source-banner{  margin-top: 10px; margin-bottom:10px;}</style><div class="itg-mosimage"><div class="itgimage"><img  title=""  class="" alt="" src="https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998April%2Ftoo-less-3-s_083012092402.jpg" loading="lazy" /></div><div class="clicktoenlarge" style="width:200px;margin-right:15px text-align:center" valign="bottom"><a href="#" onclick="javascript:window.open('https://ancillary-proxy.atarimworker.dev?url=https%3A%2F%2Fakm-img-a-in.tosshub.com%2Fsites%2Fmedia2%2Findiatoday%2Fimages%2Fstories%2F1998April%2Ftoo-less-3-l_083012092402.jpg','window','status=no,resize=no,toolbar=no,scrollbars=no,width=400,height=628'); return false;" rel="dofollow">Click here to Enlarge</a></div></div></p><p>Correcting the anomalies will pose a tough challenge for the new Government. It has promised a review for now. Finance Minister Yashwant Sinha told INDIA TODAY last week: "I will address these issues in my regular budget." Prebudget industrial lobbying has begun to ensure there will be changes in the tariff structure. There are many tricky issues for the Government to handle.<br></p><p>Under the WTO agreement, India has time till March 2000 to reduce its duties (as they existed in 1990-91) to a third. But it has already gone substantially beyond in many product categories. Of the 5,000-odd items, 4,300 are industrial. Existing tariffs on most of these items are substantially lower than even the final committed rate. But is raising revenue really an alternative?<br></p><p>Further, local manufacturers have to pay sales tax as well as octroi which inflate costs and erode India's competitiveness by 5 per cent-14 per cent. Importers do not pay any such tax. In many cases, duties on inputs are much higher than on the finished products. </p><p>Consequently, it makes sense to import finished products rather than to manufacture them locally. And that compounds the input producer's suffering. For instance, textile machinery and intermediates attract 20 per cent basic duty while raw materials such as some steel tools carry 30 per cent duty.<br></p><table class="mceVisualAid" style="margin-right: 8px; background-color: rgb(229, 229, 229);" align="left" border="0" cellpadding="3" cellspacing="3" height="202" width="446"><tbody><tr style="" dir="" id="" align="" background="" bgcolor="" height="" lang="" valign="top" xml:lang=""><td class="mceVisualAid"><div align="center"><b style="color: rgb(204, 0, 0);">Reeling under imports</b><br></div><div align="center">Aberrations in tariff structure have affected fortunes in many sectors.<br></div><div align="center"> </div><div align="center"><b style="color: rgb(204, 0, 0);">Sugar</b><br></div><b>POLICY:</b> Duty down to 0 per cent from March '94. No change so far.<br><b>IMPACT:</b> Despite a stock of 10 MT, imports continue to depress margins for manufacturers. Payments to farmers are getting delayed.<br><div align="center"><b style="color: rgb(204, 0, 0);">Capital Goods</b><br></div><b>POLICY:</b> Imports at zero duty for infrastructure and refinery sectors.<br><b>IMPACT:</b> Domestic players have lost out on orders. BHEL has lost Rs 700 crore-Rs 800 crore worth of business in the past one year.<br><div align="center"><b style="color: rgb(204, 0, 0);">Hot Rolled Steel Coils</b><br></div><b>POLICY:</b> Tariff reduced from 30 per cent last year to 25 per cent now.<br><b>IMPACT:</b> Made India more attractive for dumping. Put pressure on local selling prices, affected manufacturers' profitability.<br><div align="center"><b style="color: rgb(204, 0, 0);">DMT/PTA<br></b></div><b>POLICY:</b> Duty at 25 per cent since '96.<br><b>IMPACT:</b> Dumping. The Anti-dumping Authority has recommended imposition of final duties, but it is still to be implemented.<br><div align="center"><b style="color: rgb(204, 0, 0);">Paper Boards<br></b></div><b>POLICY:</b> Duty reduced from 65 per cent earlier to 20 per cent in '96.<br><b>IMPACT:</b> Affected investment sentiments. Imports depressed prices. ITC Bhadrachalam expects losses this year.<br></td></tr></tbody></table></p><p>With free-falling import duties, India has also became one of the favourite grounds for dumping. In 1994, only two items were being dumped: PVC resin, a rubber substitute, and bisphenol A, an organic chemical. </p><p>Today, the number of items has gone up to nine. They include newsprint, PTA and graphite electrodes (used in the steel industry). </p><p>Commerce Minister Ramakrishna Hegde will have to strengthen the anti-dumping policy.<br></p><p>The BJP's dexterity will be put to the test in its handling of such sensitive issues, without giving the signal of turning protectionist. That calls for a deft tightrope walk on policy. </p><p>If India should go global - which it must - the approach road should be first paved with an internal liberalisation of the trading system. </p><p>Europe reformed its markets and currencies internally before it sought to build a common market. India too cannot afford to have a regime of borderless trade dropped on it overnight.<br></p><div id="tab-link-wrapper-plugin"><div class="authors__container"><div class="authors__by"><div class="authlable">Published By: </div><div class="authdetaisl">AtMigration </div></div><div class="published__on"><div class="authlable">Published On: </div><div class="authdetaisl">Apr 13, 1998</div></div></div><div class="sendros">--- ENDS ---</div></div></div>

The Government is under pressure to review the tariff structure from an industry hit by drastic cuts.

India Today

Too less, too soon - India Today

Government under pressure to review tariff structure from an industry hit by drastic cuts

Too less, too soon

By working closely through diplomatic engagement, trade and cultural cooperation, Musawa believes that both nations can play a leading role in shaping a future where developing countries have a louder voice on the world stage.

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India–Nigeria ties key to shaping a stronger global south

A video of a street dog running with a police vehicle on Marine Drive, Mumbai, has highlighted the unique bond between the animal and the police officers patrolling the area.

mumbai street dog

This stray dog regularly tags along with Mumbai Police at Marine Drive

A city council meeting in Frisco, Texas, turned into a verbal clash between right-wing critics and Indian-origin citizens. While the right-wing participants alleged that Indians were committing visa fraud by acquiring H-1B visas and displacing American citizens, the Indian attendees argued they were being generalised as a community and their presence was a net benefit for the American city. 

The council meeting in the city of Frisco saw right-wing critics and Indian citizens clash over allegations of H-1B fraud and Indian population surge.  

Indian takeover of US city: Right-wing turns Frisco council meet into H-1B showdown

Britain has given Air India a week's deadline to submit a complete response, or face regulatory action against it and its fleet of 33 Boeing 787s.

Air India flight

Air India probes crew compliance after Boeing 787 fuel control switch issue

India's vulnerable dugong population shows promising stability along the Tamil Nadu coast, with a recent survey counting 270 individuals in key habitats. Conservation efforts, including protected reserves and community involvement, are key to sustaining these gentle sea cows.

India's dugong population along the Tamil Nadu coastline shows remarkable stability, with a new survey revealing 270 individuals, the largest viable group in the country. (Representational image: Getty)

Sea cows of India: Population of vulnerable mammal getting stable

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In this address, Prime Minister Narendra Modi outlines India's trajectory towards becoming a developed nation, emphasizing that the country has reached a decisive stage in its journey. He highlights that 'The world is moving very fast towards a new world order,' with India positioned as a reliable 'Vishwa Mitra' or global friend. The Prime Minister notes that while many developed nations are aging, India’s strength lies in its youthful population and significant talent pool. He contrasts the current economic stability—characterized by high growth and low inflation—with the previous 'Fragile Five' status, noting India's progress toward becoming the world's third-largest economy. Modi also mentions recent 'future-ready' trade deals, including significant negotiations with the European Union, and asserts India's role as a leading voice for the Global South on the international stage.

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Here's the drone visuals of the massive traffic jam on the Mumbai-Pune Expressway, which has hit vehicular movement for over 24 hours after a gas tanker overturned in the hilly Khandala Ghat section.

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Government under pressure to review tariff structure from an industry hit by drastic cuts

The Government is under pressure to review the tariff structure from an industry hit by drastic cuts.

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