Wanted: Better trade policies

Import tariffs discourage trade; they do not reduce the trade deficit or foster a competitive manufacturing sector

Over the past couple of years, two major economic reforms have taken off (though both may be considered as works in progress): the transition to a nationally integrated Goods and Services Tax and the activation of the Insolvency and Bankruptcy Code. On the other side of the ledger, the same period has seen continued appreciation of the real effective exchange rate of the rupee (REER) and the ominous resurrection of higher customs tariffs.

In my last column (Business Standard, July 12, 2018), I had noted that the 20 per cent appreciation of the REER (according to the RBI’s 36 country index)