5 Are
there any benefits which will accrue to the Indian economy as a consequence
of the removal of QRs on imports?
Firstly,
consumers benefit as they get a wider choice of goods and services at
a lower cost. Secondly, freer trade brings down prices and helps in
keeping the level of inflation low, which is to the advantage of the
consumer. Thirdly, the Government also benefits from higher customs
duties on imports — e.g., things which were being bought in the markets
abroad and brought into the country through various other channels can
now be brought through legal channels, thus generating revenue for the
country. (A case in point could be that of freeing of gold imports which
has resulted in gold now being imported through legal channels, with
Government earning substantial revenue through customs duty). Fourthly,
it would lead to easier access to imported raw material and capital
goods for the domestic manufacturers leading to faster industrial growth.
And finally,
competition from imports can lead to upgradation in the quality of even
domestic products and increased productivity leading to increased competitiveness
of the Indian domestic industry which could help in pushing our exports.
This means not only value for money for the consumers, but also in the
long run, a development which may help in placing the domestic industry
on a stronger footing to face international competition and to become
global players. In a sense, therefore, removal of QRs can be viewed
as not only a challenge but also an opportunity for the Indian industry
to initiate steps for enhancing their competitiveness, given the fact
that we have no alternative except to remove QRs.
