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India’s entry into global value chains requires lower tariffs, according to the CEO of NITI Aayog

During his address at the Confederation of Indian Industry’s (CII) Annual Business Summit 2024, BVR Subrahmanyam, the CEO of NITI Aayog, emphasized India’s imperative to integrate into global value chains (GVCs) to amplify exports and fortify supply chains. Subrahmanyam underscored that India’s current involvement in GVCs remains relatively limited and necessitates substantial reforms, including the streamlining of tariffs and procedures to facilitate smoother cross-border transactions.

In response to inquiries regarding non-tariff barriers (NTBs) such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), Subrahmanyam reframed them not as impediments but as imperatives for industries to conform to evolving standards. He emphasized that compliance with environmental and societal norms is essential for competitiveness, advocating for industry adaptation rather than resistance.

Subrahmanyam cautioned against protectionism, advocating instead for India to engage in more free trade agreements (FTAs) to foster a conducive trade environment. He stressed the need for India to maintain low tariffs and avoid shielding specific sectors, citing the adverse effects of protectionism on competitiveness.

Furthermore, Subrahmanyam addressed concerns regarding India’s rising tariffs, acknowledging their impact on competitiveness vis-a-vis countries like Vietnam and Thailand. He advocated for a nuanced approach to tariff utilization, mindful of potential repercussions on India’s manufacturing thrust and global standing.

Regarding infrastructure development, Subrahmanyam highlighted the government’s substantial capital expenditure but underscored the need for increased private investment. He emphasized the necessity of enhancing contract management and expediting legal processes to attract private capital into the infrastructure sector.

Subrahmanyam also disclosed that NITI Aayog is formulating reforms in the financial sector, trade policies, and education, aimed at fostering a more robust economic framework. He emphasized the need for a stronger financial sector capable of supporting Indian firms globally and fostering innovation.

In summary, Subrahmanyam’s address outlined a comprehensive strategy for India’s economic growth, advocating for reforms to enhance competitiveness, promote trade liberalization, attract private investment, and strengthen institutional frameworks.

Sadhna B

Sadhna B

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