The indian prime minister, Narendra Modi, advocates for the elimination of customs barriers everywhere in the world except in India. A few weeks after having defended the virtues of free trade at the world economic Forum of Davos, in January, where he had compared the protectionism the threat of “terrorism” or ” climate change “, Mr Modi has raised the customs duties in his country.
“I take gradually my distance vis-à-vis the policy of these last two decades, which has involved a reduction of customs duties “, said the minister of economy and finance, Arun Jaitley, during the presentation of the new budget of the federal State, in early February, before the Parliament. Tariffs were increased on more than fifty products, including automotive parts, electronic components, mobile phones, shoes, perfumes and even candles or kites. The first rate increases had been announced as early as December 2017. A tax of 3 % levied on all imported products will also be raised to 10 %.
These measures should have an impact mainly on the trade with Germany, China or the United States. “Rather than take protectionist measures, India would benefit from developing a free trade agreement with the european Union, regretted that Germany, through the voice of its ambassador in India, Martin Ney. Based on the example of american made motorcycles Harley Davidson taxed at 50 % in India, Donald Trump has threatened, in mid-February, to build a “tax reciprocity” on imports from countries that “malmèneraient” foreign trade of the United States.
Break with the policy pursued for the last twenty-five years
These protectionist measures represent a break from indian politics of the last twenty-five years. Since the liberalizing reforms of…