steps to make indian industry competitive

With forex reserves piling up rapidly and the rupee strengthening,import tariffs should be cut substantially so that the industry becomes globally competitive. The fact is that in India high tariffs were required by and permitted the existence of various distortions that were introduced by government for a variety of reasons. The problem is even more vexing for tariffs on agricultural products, where our tariffs are more defensive than protective. The high levels of subsidies given to agriculture by developed countries makes us uncompetitive despite our comparative advantage.Tariff reduction in India, must wait upon subsidy reduction by the developed countries if we are not to be suicidal.As far as our balance of payments position is concerned, the favourable conditions obtaining today are simply a reflection of the unacceptably low levels of investment in the economy. Estimates suggest that any reasonable recovery of the growth momentum will put pressure on the balance of payments, an...