Tariff Shelter must be temporary

Context: Trade protectionist policies should have a sunset clause in order to incentivize innovation and competitiveness.

Negative Effect of Trade Protectionism:

• On Firms: Artificial value addition behind the tariff wall enriches a few, and provides no incentive to innovate and reducing competitivities globally.
• On Citizens: Citizens end up paying more due to high cost domestically and overall reduced choices.

Recent Steps Taken: 

• Production Linked Incentive Scheme: Envisages export of the bulk of electronics production worth over Rs10.5 lakh crore; It would help reduce electronic import which is rapidly increasing.

• Sunset clause on import of electronics: High Import tariff on electronics like mobile phones and TVs has a sunset clause after five years.

Way Ahead:

• Achieve technological autonomy: with innovative industrial and technology policies, and not be held hostage as Huawei currently is, by US sanctions. 
• Build competitive advantage in high-end semiconductors and chip design. 
• Coherent policy incentives for start-ups and academia-industry incubators will cause technology spillovers in microelectronic hardware by integrating artificial intelligence into it.