Welfare gains of inward-looking: An ex-ante assessment of general equilibrium impacts of protectionist tariffs on India's edible oil imports Balaji S J1,*, Umanath M2, Arun G3 1ICAR-National Institute of Agricultural Economics and Policy Research (NIAP), New Delhi-110 012 2Madras Institute of Development Studies (MIDS), Chennai-600 020, Tamil Nadu 3Commission for Agricultural Costs & Prices (CACP), New Delhi-110 001 *Corresponding author: balajiniap@gmail.com
JEL Codes E16, E17, F14, F17, O53 Online Published on 16 March, 2022. Abstract Import substitution policies are often inward-looking in trade deliberations. The present study is an attempt to quantify the likely benefits of protectionist tariff hikes in enhancing domestic production and improving producer prices. It takes the case of the edible oil imports of India and estimates the price gains the oilseed producers (farmers) and the processing industries may receive; likely increase in domestic oilseeds and edible oil production, and the role the technology in attaining oilseeds/edible oil selfsufficiency. A three-sector open-economy Computable General Equilibrium (CGE) model is calibrated to a 2017–18 SAM developed for this purpose. Tariff hikes are assumed in different protectionist scenarios and their impacts on production and prices are simulated. Total Factor Productivity (TFP) estimates are derived for the oilseeds (2005–18) and the edible oil (2014–18) sectors to understand the technological penetration there. The price gains vary between 2.4% and 6% to the oilseeds producers and between 1.2% and 2.9% to the edible oil industries. The oilseeds production may enhance by 1.8% at maximum, and the edible oil production by 2.9%. The existing TFP growth is inadequate to move towards oilseeds/edible oil self-sufficiency. This demands a shift in production technology. Top Keywords Import substitution, Oilseeds, Edible oil, SAM, CGE, India. Top |