India remains concerned about the threat to global growth and trade from the proposed tariff hikes by the US administration, finance and revenue secretary Tuhin Kanta Pandey said on Tuesday, while underlining that India is not looking at any protectionist measure.
“Fundamentally, what is of concern is the threat to global growth and trade. Every nation gets affected and we also get affected,” Pandey said at the India Today- Business Today Budget Round Table 2025, noting that the 1929 depression highlighted how “a lot of protectionism led to pauperisation of everyone”. He was responding to a question on whether the depreciation in the rupee against the US dollar is a matter of concern.
“We are concerned about the fact that protectionism will lead to deceleration in global growth and trade but we have to be prepared for the situation,” he further underlined.
Pandey however, said that India will be in a position to protect its national interest and is not getting into any protectionist mode. Referring to the rationalisation of customs duty rates in the Union Budget 2025-26, he said that out of about 8,000 tariff lines, about 6000 tariff lines have a duty of less than 10%. “The average tariff rate is 10.6% close to ASEAN. We understand we have consumers and economic competitiveness of industry to watch for,” he said.
Elaborating on the Budget, Pandey said it is non-inflationary and the fiscal deficit target of 4.4% for FY26 is “within our range”. He also stressed that capital expenditure remains “at a pretty high level” noting that the effective capital expenditure in FY26 is projected at Rs 15.48 lakh crore which is a 17% increase from FY25. CPSEs will also invest about Rs 4.5 lakh crore in capital expenditure on their own while states too will invest in capex from their own resources.
“We only look at one number, which is the direct capex,” he said, refuting concerns that the Centre has not boosted capex significantly in the Union Budget 2025-26, and at Rs 11.21 lakh crore in FY26, it is a 10% hike from the revised estimate of Rs 10.18 lakh crore in FY25.
The income tax relief in the Union Budget will have a multiplier effect on savings and consumption and along with relief for the middle class, the effort is also to nudge the entrepreneurial spirit of the private sector, he said.
“We want the private sector to invest more. We want the animal spirit to be rejuvenated. There will be extra demand for private investors to start investing,” he stressed.
The Union Budget 2025-26 has proposed that there will be zero tax on annual income upto Rs 12 lakh along with a significant rejig of the income tax slabs under the new income tax regime.
Pandey also expressed hope that the GST Council will take forward the rationalisation of rates of the goods and services tax going forward. “There is a realisation and scope for rationalisation going forward. So a balanced view has to be taken. The GST Council is ceased of the matter and will carry it forward,” he said.