New Delhi: Commerce and Industry Minister Piyush Goyal on Saturday said India was looking at introducing a "border adjustment tax" on low cost imports from free trade partner countries, which will bring level playing field between such imports and locally produced goods.
The proposed tax is perfectly compliant with the World Trade Organisation’s (WTO) rules on multilateral trade, Goyal said in his address to industry leaders at the Economic Times Awards for Corporate Excellence, 2019, on Saturday in Mumbai. The proposal for a "border adjustment tax" came up from a domestic steel maker at a recent meeting on ‘Make In India’, the minister said.
“It is a perfectly WTO compliant way to bring parity between low cost imports coming through the Free Trade Agreement (FTA) route and domestically manufactured items to ensure that our industry does not get affected by low cost imports. We are already working on the idea that the steel industry gave, which is a perfect idea to help us tackle the challenges of FTAs," the minister said.
Goyal emphasised that India’s trade policy rests on national interest as well as on the interests of its people and the industry, which will guide all government engagement with the rest of the world.
“The interest of our people and industry are paramount. That is the terms of India’s engagement with the rest of the world. No more will India stand with weak knees or play on the backfoot," the minister said, adding that India walked out of the Regional Comprehensive Economic Partnership (RCEP) deal earlier this month when the country’s concerns were not adequately addressed.
New Delhi had held marathon talks in Bangkok at the beginning of November with 15 other nations to get favourable terms that will protect its domestic industry’s interests but subsequently walked out of the deal for the time being.
“I can assure you that every engagement India has with the rest of the world will rest on the principle of national interest and the interests of our trade and industry," Goyal said.
The minister also said that India, which offers a big market for global investors and trade partners, is an oasis among geopolitical turmoil all around. “We are in challenging times. The world is seeing a turmoil all over. Within that geopolitical turmoil that we see around us, I see India as that oasis which can lead world growth and lift the sentiment of industry and trade and across continents," the minister said. Goyal also said, while quoting Warren Buffett, that people need to maintain self-confidence and not talk themselves into a recession.