Best of BS Opinion: India must address trade barriers, open up for business | Opinion Specials

Hello, and welcome to the Best of BS Opinion, our wrap of the day’s Opinion page. The WTO’s latest review of India’s trade policy highlights concerns from the US and EU over tariffs, sanitary and phytosanitary norms, digital trade restrictions, and the proliferation of quality control orders. While some criticism may overlook similar barriers imposed by other countries, today’s first editorial finds several concerns valid and urges India to embrace greater trade openness. Tariffs remain high by peer-country standards, limiting India’s ability to join global value chains and potentially discouraging foreign investment. The rapid expansion of QCOs also warrants a thorough review, given their impact on smaller businesses. With the rupee weaker in real terms and exports rising, tariff cuts are particularly timely. At the same time, the US’s own protectionism underlines the need for a stable bilateral trade agreement. The DCC’s approval of Trai’s recommendations on satellite spectrum pricing marks an important step towards launching satellite internet services in India. Spectrum will be priced at 5 per cent of adjusted gross revenue, with a reduced rate of 4 per cent for services to remote and rural areas, and allocated for five years with a possible two-year extension. Our second editorial welcomes this clarity but urges the government to expedite Cabinet and security clearances, pointing to prolonged delays that have held up commercial launches. Regulatory uncertainty over spectrum auctions, administered pricing, and licensing has compounded the problem, while security concerns have slowed approvals for operators including Eutelsat OneWeb and Starlink. Faster decisions are essential if satellite internet is to improve connectivity in underserved areas. The inability of boards to plan CEO succession stems from their reluctance to challenge powerful incumbents, creating a governance weakness that can remain concealed until a leader departs or a crisis erupts. Examples from Tata Sons and HDFC Bank illustrate how boards can defer difficult decisions, while the Royal Bank of Scotland’s collapse after its ill-fated ABN Amro acquisition shows the potentially disastrous consequences. Excessive “collegiality”, cosy relationships, and CEO influence over board appointments further weaken independence, notes T T Ram Mohan. He proposes breaking the cycle through greater stakeholder involvement in selecting independent directors, stronger independent oversight of nominations, and treating board membership as serious professional work rather than an honorary position. The FCNR(B) scheme may have stabilised the rupee, but the resulting surge in banking-system liquidity has created a fresh policy dilemma. The RBI absorbed much of the $136.4 billion inflow, releasing more than ₹10 lakh crore into the system, and now faces several costly choices. Allowing the money into the market could trigger excessive rupee appreciation, while leaving reserves with banks risks credit expansion and inflation. Raising the CRR would impose losses on banks, and selling government securities could disrupt bond markets.Prasanna Tantri favoursthe Market Stabilisation Scheme, despite its fiscal cost, because it can sterilise liquidity without making banks dependent on reserves that may later prove difficult to withdraw. BRICS as A Global Alternative: Prospects and Concerns for India, a collection of essays and addresses from a seminar in Kolkata earlier this year and edited by Suranjan Das and Tridib Chakraborti, examines Brics’ evolution from an economic grouping of emerging economies into a broader coalition seeking a more inclusive and multipolar global order. Its contributors highlight the opportunities and complications created by the bloc’s expansion, writes Rup Narayan Das in his review. Rajiv Bhatia advocates the idea of Brics as “non-West” rather than “anti-West” to preserve strategic autonomy. The book also presents Brazilian and Chinese perspectives on the grouping’s role. Krishnan Srinivasan and Sreeram Chaulia raise questions about its strategic coherence, particularly amid India-China tensions and China’s growing economic weight. Rup Narayan Das finds the volume useful but notes its inadequate treatment of the New Development Bank, Contingent Reserve Arrangement, and the India-China trust deficit.