The article ‘Needed, a nuanced tariff policy’ (June 26) makes an eminently logical and reasoned case for a nuanced approach in India’s tariff policy formulations. This assumes much significance as negotiations on FTAs with the US and the UK are going on and the tariffs negotiated with these two nations will have a bearing on the future course of our tariff policy formulations as well.

The need for protecting and nurturing domestic manufacturers, especially MSMEs, cannot be overemphasised. Many events have proved beyond doubt that in international relations, there are no permanent friends, but only permanent national interests. India’s existing tariff system, coupled with calibrated customs duties, has served the country’s interests very well. India should not succumb to the pressures from big powers. India should not reduce the tariffs at the cost of domestic manufacturers. .

Kosaraju Chandramouli

Hyderabad

Economic instability

This refers to ‘Economy bucks trend of global instability: RBI bulletin’ (June 26). Economic instability is a rarity in the Indian economy. The government as well as the RBI are cautious in handling macroeconomic variables such as aggregate demand and aggregate supply including exports and imports of goods and services) to ensure economic stability. There is sectoral imbalance, but it doesn’t affect the stability of the economy.

S Ramakrishnasayee

Chennai

Assist SFBs

Small finance banks play an important role in helping those who do not have access to institutionalised banking. By giving credit to housewives and other small enterprises, they are also helping entrepreneurial talent bloom beside providing a bulwark against the usurious interest rates of moneylenders. Instead of those schemes of giving cash doles to women, better if the governments help the SFBs with easier lending norms.

Anthony Henriques

Mumbai

RBI’s dividend transfers

This refers to ‘RBI as a source of abundant riches’ (June 26). The RBI’s dividend transfers to the government have been consistently rising. However, this growing dependence on RBI’s surplus raises concerns about a potential shift in its policy mindset possibly at the cost of its core objectives: maintaining price stability and supporting sustainable economic growth. Several monetary tools at the RBI’s disposal, if not used strictly through the lens of monetary stability, may give rise to conflicts of interest. For instance, a weakening rupee against the dollar leads to valuation gains on RBI’s foreign exchange reserves, but this often comes with higher imported inflation, adversely impacting consumers and importers. While dividend transfers are part of the central bank’s mandate, emphasis on revenue generation could risk misaligning monetary tools away from their primary function ensuring monetary and financial stability.

Srinivasan Velamur

Chennai

Published on June 26, 2025