Thiruvananthapuram | Kerala Finance Minister K N Balagopal on Tuesday warned that the emerging global tariff war, led by the United States, could have a more damaging impact on the economy than the Covid pandemic.
Speaking at a seminar on ‘Post-Covid Development Challenges and Responses: Kerala through the Lens of State Budgets', organised by the Gulati Institute of Finance and Taxation here, Balagopal said, “While India is being asked to reduce tariffs on imports, the US is imposing higher duties on our exports. This imbalance will affect the Indian economy.” Citing examples, he said India has already reduced import duties on vehicles like Land Rover and Jaguar to 10 percent. At the same time, he alleged, international companies are pressuring India to lower its Goods and Services Tax (GST) rates.
Despite a reduction in the state's borrowing limit by the Centre, Kerala has managed its finances post-Covid through increased revenue collection, Balagopal added.
“The state's revenue as a percentage of GSDP grew from 56 percent in 2020-21 to 74.89 percent in 2024-25,” he said.
Tax and non-tax revenues rose from Rs 54,000 crore in 2021 to Rs 92,000 crore in the last fiscal.
Highlighting the government's priorities in recent years, Balagopal said the focus had been on strengthening infrastructure and social security.
He termed the commissioning of the Vizhinjam International Seaport a significant achievement and added that the government had invested in enhancing research and development facilities at premier institutions in the state.
The minister also criticised the GST regime introduced in 2017, calling the division of tax revenues between the Centre and states “unjustifiable.” “Covid brought about social, political, and economic disruptions, leading to stagnation. The state is now striving to move forward from that,” he added.
The United States has slapped a 25 per cent tariff on Indian goods as part of a broad trade measure targeting nearly 70 countries, according to an executive order issued by the White House recently.
