Showing posts from April, 2016

Are we really ready for RCEP?

I had blogged a year ago about our approach to RCEP . My views at that time is reflected in this article of Business standard . At that time, the debate in the media was not vibrant about the RCEP topic. Now it has heated up. To sum up, from various articles here , here and here : India has taken the normal approach of hard-negotiating behind high tariff walls.  India doesn't have much choice as we are, among the RCEP nations, stuck with high tariff barriers due to legacy revenue generation issues. India has calculated that it stands to lose 1.6% of GDP in revenue if she gives up on some of these high tariff barriers.  It pinches India to give up these high tariff barriers when other countries don't have much to return due to their already low tariff barriers.  Therefore, in return to reduction in tariff barriers in goods, India is expecting others to reciprocate in services.  I have been, through this blog, an ardent supporter of open borders and low tariffs. Th

Rethinking barriers on steel imports into India

India has taken various measures to curb cheap steel imports into India during the last one and half years. They chiefly include: Anti-dumping duties on some steel items Safeguard duties on few, and, Making Minimum Import Price (MIP) mandatory on some steel items The intention behind the above is to protect domestic steel industry. To that extent, the measures are succeeding. The local steel industry led by leading capitalists of the country is surviving if not thriving. The above measures were the result of effective lobbying by the steel industry. The same has repeated across many countries, like USA, in the recent past. UK too is now feeling the heat with Tata Steel pulling out of steel sector there due to cheap Chinese imports. Why is steel so important? The argument in general policy circles goes this way. One, steel sector is a strategic sector. Defence and infrastructure depend on it. Two, it generates big employment. Three, the sector has unionised labor. Government