'National security can justify higher tariffs'

India can raise import tariffs after securing intermediates supply: Virmani

- Rhik Kundu & Gireesh Chandra Prasad

National security concerns could justify imposing higher customs duties on imports from certain countries, particularly China, once India has established more free trade agreements (FTAs) to secure the supply of key intermediates, NITI Aayog member Arvind Virmani said.

Virmani said once the proposed FTAs with developed economies such as the European Union (EU) and the UK are effective and functional, one could look at the broader issue of import concentration and differential tariffs to achieve “diversification and de-risking". He added that he was only speaking in terms of economic ideas and not government policy.

With tariff-related measures, Indian businessmen can be encouraged to look beyond China for sourcing intermediate goods and raw materials at competitive prices and the required quality, once India breaks into global supply chains comfortably and scales up its share in world trade, Virmani said.