New Delhi: An Indian parliamentary committee has recommended reducing tariffs on imported raw materials to support local manufacturers. These manufacturers are expected to face increasing pressure in upcoming trade negotiations with Washington.
The committee, established to review trade and commerce legislation, suggested that tariffs on raw materials should be lowered to match the lower duties imposed on imported finished goods. The move aims to enhance the competitiveness of domestic manufacturers.
India is preparing to launch negotiations on a trade pact with the US, where President Donald Trump has been advocating for significantly reduced duties on American imports. Additionally, India is pursuing trade agreements with the European Union and New Zealand this year, while also expediting talks with Britain.
The committee’s report, while not directly referencing the upcoming US trade talks, emphasized the need to ensure fair competition for Indian manufacturers.
“The committee recommends implementing matching tariff reductions that adjust duties on raw materials in response to lower import duties on finished goods,” the report stated.
The proposal aims to correct the so-called inverted duty structure, where tariffs on raw materials and intermediate goods exceed those on finished imports, inadvertently promoting imports over local production.
The panel also urged a comprehensive reassessment of all existing free trade agreements to identify sectors where raw material tariffs surpass those of finished goods.
