Finance Minister Nirmala Sitharaman called on stakeholders to believe in India’s potential and nurture a more positive sentiment, especially as the country remains the world’s fastest-growing major economy amid global turmoil. In conversation with Sruthijith KK at the 25th ET Awards for Corporate Excellence, the minister said India needs to guard against dumping of goods in the wake of the Trump administration imposing additional tariffs on some countries. Edited excerpts:
Your budget this year created a lot of positivity, due to tax cuts, the continued support for capex and staying the fiscal consolidation course. But we face geo-economic uncertainty. What is going to be the game plan? How are we going to negotiate with the US?
In all fairness, I think I would leave it for (Commerce Minister) Piyush Goyal to determine how he is going to take forward the whole negotiations. He and his team are at it even as we speak. I think both sides (India and the US) should have ambition for a good treaty. And nobody can fault that, particularly for India. We still need to do a lot more to strengthen our exports. I am sure the commerce minister is quite seized of this. And he would take this (India-US) agreement to meet the ambitions that we have in terms of growth. That would guide his negotiations.
Geo-economic fragmentation is now a reality. In some ways, it’s a reversal of the forces of globalisation that have created a lot of prosperity. Do you think this will impede India’s growth momentum?
I see an opportunity in each of the challenges that exist—be it the geo-economic fragmentation or tariff war or some economies reaching a deflationary level or the lack of demand overseas. As our Prime Minister says, “Where there is a challenge, there could be an opportunity” and this tendency is being built into all of us in the Cabinet. And it is for us to very smartly move to make sure that this is the opportunity that India was waiting for. After all, it is another 22 years before we should reach the goal of a Viksit Bharat.
While other countries also face offensive tariff action, there is a real chance that some of them could dump their goods in India. Are we guarding against it?
Well, yes, you are already seeing signs of that dumping of excess inventory, and you largely know which country we are talking about. When such a chance exists, we will have to guard ourselves against it. We need to be smart about these sorts of things—about how carefully we can find a way to avoid it.
There are small and medium Indian manufacturers who prefer cheaper inputs. But even then, the larger consideration should be to allow them access to cheaper inputs without letting them become a victim of dumping. And among the stakeholders, there are sections which prefer complete stoppage of dumped goods and some others who prefer a calibrated approach to it. The government’s task is to make sure that we plan for it and balance everybody’s interests.
Is it time to look at a more comprehensive rationalisation of GST slabs?
It was late 2022 when we started this exercise of rationalising the Goods and Services Tax (GST)—both rationalisation of the rates as well as the number of slabs, and review of compliances and the process itself. In early 2023, some people were saying, “You are not even allowing the GST to settle; after all, it was launched in 2017 and you’re already starting to revamp it.” So, there was an element of discouragement. But we didn’t stop it.
Different groups of ministers were looking at it. And every time there is a state government election and there’s a change of ministers, we revamped the committees. But that work has almost reached a finale. The groups have done excellent work, but I still have taken it upon myself to, once more, completely review each of the group’s works, and then take it to the GST Council to see if we can come to a final agreement on these. So, we are very close to coming to a final call on some of the very critical issues—reduction and rationalisation of rates, looking at the number of slabs, and so on.
Is there any possibility you can give us a glimpse into what is in store any more than what you have said?
I think I was very clear about the reduction in rates. And that is not as thoug
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