India’s recent decision to reduce import duties on a wide range of products sends a clear message that the country is moving away from protectionist policies, according to the nation’s finance secretary Tuhin Kanta Pandey. A Bloomberg report said that Pandey emphasised on the fact that India is not embracing high tariffs as a means of economic protection, especially in light of the growing trade tensions between the US and its neighbors, including China.

Pandey described the move as a signal to both domestic industries and international investors. The government lowered tariffs on products across sectors like electronics and textiles on Saturday, starting February 2. The reductions come at a time when the U.S. has imposed tariffs on Canada, Mexico, and China, sparking retaliatory actions from those countries.

Pandey remarked that their approach is clear and that India doesn’t want to resort to “protectionism”, pointing out that that the country’s tariffs are actually lower than those in some advanced economies such as Japan. He explained that the tariff cuts aim to provide a stable and predictable policy environment for investors.

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The government has reduced import duties on solar modules and high-end motorcycles, the latter addressing a long-standing issue that dates back to the early days of Donald Trump’s presidency.

Regarding the upcoming fiscal year starting on April 1, Finance Secretary Pandey confirmed that the government would adhere to its fiscal deficit and borrowing targets as outlined in the budget.

The new budget increases the personal income tax exemption limit and adjusts tax slabs, which will result in a revenue shortfall of one trillion rupees in the next fiscal year. Pandey explained that these tax changes are expected to stimulate consumption and investment, creating a multiplier effect.

Addressing concerns over U.S. President Trump’s warning to BRICS countries about potential 100% tariffs if they attempt to replace the dollar with a new currency, Pandey assured that India has “no intention” of replacing the dollar as the global reserve currency.