Union Budget 2021: US business advocacy group urges Nirmala Sitharaman to lower tariff to compete with RCEP

India had walked out of the RCEP, a 14-member group led by China, as negotiations failed to address New Delhi's outstanding issues and concerns

Press Trust of India January 18, 2021 15:45:34 IST
Union Budget 2021: US business advocacy group urges Nirmala Sitharaman to lower tariff to compete with RCEP

Union finance minister Nirmala Sitharaman. ANI

Washington: A top India-centric American business advocacy group has suggested Finance Minister Nirmala Sitharaman to lower tariff in the Union Budget if the country wants to compete with China-backed mega free trade agreement Regional Comprehensive Economic Partnership (RCEP).

China and 14 other countries in November last year established the world's largest trading bloc that represents roughly 30 percent of the world's GDP and population.

India walked out of the mega free trade agreement as negotiations failed to address New Delhi's outstanding issues and concerns.

The members of RCEP are 10-nation bloc ASEAN (Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia), China, Japan, South Korea, Australia and New Zealand.

“If India can focus on a much more predictable environment from a policy framework it will give more confidence to the investors. Bringing a sense of transparency in policy making also sends a very positive signal. And if India is going to be competing, especially with the RCEP, then it has to look at lowering its tariff,” Mukesh Aghi, president of US India Strategic and Partnership Forum (USISPF) told PTI.

Pointing that in the last 12 months tariffs in India have been going up and up, he said, “What it does is yes, it protects a local industry, but it doesn't make them competitive. So, it is important to protect the local industry, but at the same time, it is important to make them more competent intervals. Lowering of tariff is important."

In a recent submission to the Union Finance Minister, USISPF recommended specific measures to improve direct and indirect tax collection, which will promote private investment and ensure fiscal and monetary stability.

“On the direct taxation side, we recommend specific amendments to facilitate activity in the digital economy, reduce tax and depreciation rates to boost investment, clarify carry-forward and loss-offset rules, and streamline regulations related to withholding tax, indirect transfer, and dispute resolution,” USISPF said.

“For indirect taxes, we recommend amendments to address challenges with deferred duty payments, simplify various processes and procedures, and align customs regulations more closely with actual industry practices. Together, these changes will free up much-needed investment capital, make it easier for companies to manage their tax liabilities, and provide a needed boost to the economic activity during the next fiscal year,” it added.

To increase MSME access to finance in India, USISPF has recommended specific steps to promote supply-chain financing, subsidise the insurance of MSME loans, improve the assessment of MSME credit risk and loan disbursement, and facilitate faster settlement of claims between healthcare providers and insurers.

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

UN report: Huge changes in society, economics, power generation needed for Earth to remain habitable
World

UN report: Huge changes in society, economics, power generation needed for Earth to remain habitable

Changes in governments taxation, how nations assess economic output, generate power, and public transport will be needed, the report says.

Market roundup: Sensex falls to 49,099.99, Nifty settles at 14,529.15 amid sell-off before release of Dec GDP data
Business

Market roundup: Sensex falls to 49,099.99, Nifty settles at 14,529.15 amid sell-off before release of Dec GDP data

All the shares in the BSE Sensex closed in red on Friday with ONGC being the top loser, shedding 6.6 percent, followed by Mahindra & Mahindra, Bajaj Finserv, and Axis Bank

Indian economy exits technical recession as GDP grows at 0.4% in Oct-Dec quarter
Business

Indian economy exits technical recession as GDP grows at 0.4% in Oct-Dec quarter

However, the annual GDP estimate for the fiscal year ending 31 March has been revised to an 8 percent contraction, deeper than an earlier estimate of (-) 7.7 percent