Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
Q5. “India must move from being a protector of inefficiency to a champion of competitiveness”. Explain the significance of this transition. Analyse the key challenges in tariff rationalisation. Suggest policy measures for strengthening value chains to enhance trade competitiveness. (15 M)
Difficulty Level: Medium
Reference: IE
Why the question
India’s tariff structure has come under scrutiny globally, especially with US criticism, and the article highlights the need to shift from excessive protectionism to competitiveness through reforms.Key demand of the question
The question asks to explain why this transition is significant, analyse the challenges in rationalising tariffs, and suggest reforms for strengthening value chains to improve India’s trade competitiveness.Structure of the Answer:
Introduction
Briefly state India’s current tariff stance and its implications for growth and global credibility.
Body
- Significance of the transition – show how moving from protectionism to competitiveness boosts exports, consumer welfare, and credibility.
- Challenges in tariff rationalisation – highlight farmer livelihoods, fiscal revenue, lobbying pressures, and risk to MSMEs.
- Policy measures for value chains – mention TRQs, agri-R&D, subsidy reforms, logistics, and cluster-based linkages.
Conclusion
Summarise with a forward-looking line on tariff reforms as a tool for resilience and global competitiveness.
