India has long had a relatively protectionist trade policy but, driven in part by the reciprocal tariff threat from the US, there appears to be a slight shift in approach from policymakers. Import duties on certain goods are being lowered as concessions to the Trump administration. More broadly, the government appears to have redoubled efforts to strike free trade deals with the UK and the EU (among others), most likely in an effort to strengthen its export base beyond the US. Politically-sensitive sectors such as agriculture will probably remain behind high trade barriers. But less protection for domestic producers in other sectors would be good for economic growth in the long run by fostering more competition and forcing local firms to seek productivity gains.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services