Donald Trump has become the 47th President of America. Putin has dealt a blow to his promise to end the Russia-Ukraine war in 24 hours. Putin-Jinping have held a meeting after inviting Chinese President Xi Jinping to his oath ceremony and then criticizing China in his speech immediately after the oath taking ceremony. Right after taking the oath, people from France, Germany to the European Union have all slammed Trump. Obviously the equations are changing rapidly in the world. Meanwhile, the meeting of Indian Foreign Minister S Jaishankar and Marco Rubio in Washington DC can be considered very important. Jaishankar’s statement in America clearly means that Trump is taking India very seriously. However, he also has differences with India regarding tax. Trump, who is playing tax-tax with the world, may get his break through the budget. Finance Minister Nirmala Sitharaman can work on making India the world’s factory. Because till now China, considered the factory of the world, is on a direct collision course with America. Experts believe that the Union Budget is a strategic opportunity for India to address the concerns related to its foreign trade interests. In view of the increasing unrest in the world, India can focus on its domestic industries.
What is special in Budget 2025?
In its recommendations for the upcoming Union Budget, the Global Trade Research Initiative (GTRI) has urged the government to simplify the customs structure by reducing the number of tariff slabs from 40 to just five. It believes that taxing raw materials at lower rates than finished goods will help in reducing import costs, promoting domestic manufacturing and promoting exports. GTRI has also recommended reducing India’s average tariff by about 10%. He believes the move can be implemented without significant revenue loss. Currently, 85 per cent of duty revenue comes from only 10 per cent of import duty categories, while 60 per cent of duty categories contribute less than three per cent to the revenue. According to the report, the share of customs duty in India’s gross tax revenue has declined to just 6.4 percent, while corporate tax (26.8 percent), income tax (29.7 percent) and GST (27.8 percent) are far ahead of it.
Emphasis will increase on self-reliant India
In 2014, the Narendra Modi government launched the ‘Make in India’ campaign. Since then it has become an important part of the dream of a developed India 2047. This is the reason why domestic products are being continuously promoted. Experts are hopeful that the budget could provide a significant boost to the country’s manufacturers. To strengthen India’s manufacturing sector, the Budget may phase out existing customs duty exemptions on most products. This step will encourage domestic production, reduce dependence on imports and promote Make in India campaign.
Now India instead of China
Experts said that if Indian businesses get more promotion domestically, it will help in reducing India’s trade dependence on partners like China. Currently, India has a trade deficit of $85.1 billion with Beijing. China currently exports to America and other countries on a large scale. Encouraging domestic production of these goods will not only boost India’s export potential, but India can become an alternative to China as the world’s factory.
America China trade war decided again
India can also review its trade agreements with global partners including the United States of America. During the first term of Trump (Donald Trump), America’s trade war with China was seen and at that time the demand for Indian goods in America increased because American companies were looking for an alternative to China. Then in 2020, the Corona epidemic came and it once again forced the world to think about its dependence on China. Now once again the atmosphere is the same. Or it would not be wrong to say that the environment for China is even worse. In such a situation, trade war between America and China is considered almost certain.
trade agreements will have to be made
In November, External Affairs Minister S Jaishankar had said that if the world sees changes in the supply chain, it will mean an opportunity for India. If India signs trade agreements with other countries except China and America, it will be a big victory for India. The government may review existing free trade agreements (FTAs) with ASEAN countries to determine whether trade policies are in line with the goal of promoting domestic manufacturing. Rationalizing the concessional duty imports under these FTAs can help reduce the flow of cheap imports and support local industries. That is why it is believed that this time Nirmala Sitharaman can make special announcements for India’s domestic industries in view of the situation in the world.
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