✅ What is a Tariff Rate?

A tariff is a tax or duty imposed by a government on imported or exported goods.

The tariff rate is the percentage of the value of the goods that’s charged as tax.

For example:

If India imposes a 10% tariff on imported steel worth ₹1,00,000 — the importer must pay ₹10,000 as tax.

📊 Impact of Tariff Rates on the Indian Market

Tariff rates can have multiple effects on the Indian economy and markets, both positive and negative:

🔼 Positive Impacts (Higher Tariffs):

1. Protects Indian industries: Makes foreign goods costlier, encouraging people to buy local products.
2. Boosts “Make in India” initiative: Helps domestic manufacturers grow.
3. Increases government revenue: Tariffs add income to the national budget.

🔽 Negative Impacts (Higher Tariffs):

1. Costlier imports: Raises the prices of goods like electronics, oil, or raw materials.
2. Inflation: As import costs rise, prices of products in the market may also increase.
3. Retaliation risk: Other countries may impose tariffs on Indian exports in response (trade war).
4. Affects companies dependent on imports: Sectors like auto, pharma, and tech might face higher production costs.

💡 Example in Indian Context:

• When India raised tariffs on Chinese electronics, it helped local companies like Dixon Technologies.
• However, it also made gadgets like smartphones and TVs more expensive for consumers.