India’s Import Tariff Evaluation during Recent Financial Crisis

Abstract

There are two different opinions about India’s import liberalization surfaced in the recent global financial crisis era. Some expressed India to be one of the highest trade restrictive economies and others appreciated India for lowering import tariffs and making trade free. This empirical exercise compares import tariff in pre- and post-crisis. Trade Liberalization Evaluation (TLE) methodology is being used to see the dynamic and general equilibrium analysis of pre- and post-crisis of India’s import tariff liberalization through a set of indexes and graphs. India’s applied average tariff rates are collected from Integrated Data Base (IDB), World Trade Organization (WTO). As per the requirement of TLE, four sectors were evaluated. Service sector is not included in this work since India is one of the services exporting economy. In total, 200 import items were collected which includes 50 items in each sector namely agriculture, heavy industry, light industry and allied areas. As a result of sectoral compression between pre- and post-crisis, agriculture shows expansion, while heavy industry and light industry shows contraction and allied shows stagnation. The overall comparison of Trade Liberalization Stage (TLS) Index shows a developed stage of India’s trade liberalization. This article may be imperative for importers and business community of India and the world.