In the middle of talks globally about putting up trade barriers, Indian government officials said that they’ve not changed their approach to import limits and taxes on Chinese goods.
The government is still looking into how much China is flooding the Indian market, but officials made it clear that they’re adding taxes to stop cheap, low-quality imports from countries that aren’t open about their pricing tactics. They also said these import taxes are meant to help the ability of other countries to compete when selling to India, including the US and EU.
In the 2023-24 financial year, 4% of India’s tax money came from import taxes. Government sources said they’re not using import taxes to make money but to give Indian companies a fair shot.
Ajay Srivastava, who started the Global Trade Research Initiative (GTRI), pointed out that India’s revised budget for 2024-25 shows import taxes making up 6.4% of all tax collections (₹ 2.18 lakh crore). This shows a change in where India’s tax money comes from. He said import taxes don’t bring in as much money as they used to, comparing it to income tax at 29.7%, total tax at 27.8%, and company tax at 26.8%.
Srivastava stressed that this trend is even more apparent when you look at how much India imports, with import taxes accounting for 3.9% of total imports.
He said import taxes aren’t the main way to make money anymore, and he wants the government to consider taxes. Instead of just thinking about making money, he says they should use taxes to help boost Indian manufacturing. He’s calling for an extensive review of import taxes, saying they should be changed to help Indian companies make more things join global supply chains and rely less on imports for essential industries.
