Efforts being made to undermine federal structure, says Thomas Isaac
New Delhi (PTI): Former Kerala Finance Minister Thomas Isaac on Saturday said efforts are being made to undermine the country's federal structure and pitched for making federalism a major issue of national discourse, amid a tussle between the governor and the government in the state.
A senior leader of the ruling CPI(M)-led front in the state, Isaac also said the central government does not believe in the country's diversity and was trying to homogenise things.
Criticising the Centre about its views on freebies, he said the central government was trying to discipline states whereas it has reduced corporate tax rate and through Production Linked Incentives (PLIs), freebies are given for production.
He was delivering the fifth LC Jain Memorial Lecture on 'The Challenges of Federalism: Negotiating Centre State Tensions' in the national capital. LC Jain was a Gandhian activist and writer.
Referring to the tensions between Kerala Governor Arif Mohammed Khan and the state government, Isaac said in a parliamentary system, the power is with the Cabinet which is accountable to the elected representatives. "It is a well settled matter."
On Saturday, the state government sent an ordinance to remove the Governor from the post of chancellor of universities in the state, to the Raj Bhavan for approval, days after the cabinet had taken a decision in this connection.
Sources said it was unlikely for the Governor to promulgate the ordinance soon as the tussle between him and the state government over the issue is yet to die down.
"Constitution does not say that Governor is the Chancellor. That status is given through the legislation in the assembly... Never has this happened. There is some decorum in dealing with each other... there was a civility in discourse," Isaac noted.
Further, he said the whole scenario is changing. "Why? because for the first time in the history of the country, we are having a government that does not believe in the diversity of the country... you want to homogenise the nation, one nation, one culture, one nation, one law, one nation, one election...
"Once you have that ideology itself, then every opportunity is made to undermine the federal system that exists. This is a terrible situation," he said.
While noting that there must be a political response to address the situation, Isaac said federalism has to become a major issue of national discourse.
"At the state level... you develop alternatives within the federal system that is possible. The nation must reflect regional aspirations... and a lot of action is possible at the local level," he said.
Isaac also pitched for some federal flexibility in the Goods and Services Tax (GST) regime.
The function was organised by the LC Jain family and the Association for Democratic Reforms (ADR).
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India proposes preferential trade agreement with Mexico to deal with high tariffs
New Delhi (PTI): India has proposed a preferential trade agreement (PTA) with Mexico to help domestic exporters deal with the steep tariffs announced by the South American country, a top government official said on Monday.
Mexico has decided to impose steep import tariffs - ranging from about 5 per cent to as high as 50 per cent on a wide range of goods (about 1,463 tariff lines) from countries that do not have free trade agreements with Mexico, including India, China, South Korea, Thailand and Indonesia.
Commerce Secretary Rajesh Agrawal said that India has engaged with the country on the issue.
"Technical level talks are on...The only fast way forward is to try to get a preferential trade agreement (PTA) because an FTA (free trade agreement) will take a lot of time. So we are trying to see what can be a good way forward," he told reporters here.
While in an FTA two trading partners either significantly reduce or eliminate import duties on maximum number of goods traded between them, in a PTA, duties are cut or removed on a limited number of products.
Trading partners of Mexico cannot file a compliant against the decision on imposing high tariffs as they are WTO (World Trade Organisation) compatible.
The duties are within their bound rates, he said, adding that their primary target was not India.
"We have proposed a PTA because its a WTO-compatible way forward... we can do a PTA and try to get concessions that are required for Indian supply chains and similarly offer them concessions where they have export interests in India," Agrawal said.
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Citing support for local production and correction of trade imbalances, Mexico has approved an increase in MFN (most favoured nation) import tariffs (5-50 per cent) with effect from January 1, 2026 on 1,455 tariff lines (or product categories) within the WTO framework, targeting non-FTA partners.
Preliminary estimates suggest that this affects India's around USD 2 billion exports to Mexico particularly -- automobile, two-wheelers, auto parts, textiles, iron and steel, plastics, leather and footwear.
The measure is also aimed at curbing Chinese imports.
India-Mexico merchandise trade totalled USD 8.74 billion in 2024, with exports USD 5.73 billion, imports USD 3.01 billion, and a trade surplus of USD 2.72 billion.
The government has been continuously and comprehensively assessing Mexico's tariff revisions since the issue emerged, engaging stakeholders, safeguarding the interests of Indian exporters, and pursuing constructive dialogue to ensure a stable trade environment benefiting businesses and consumers in both countries.
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Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai has said that Mexico's decision is a matter of concern, particularly for sectors like automobiles and auto components, machinery, electrical and electronics, organic chemicals, pharmaceuticals, textiles, and plastics.
"Such steep duties will erode our competitiveness and risk, disrupting supply chains that have taken years to develop," Sahai said, adding that this development also underlines the little urgency for India and Mexico to fast-track a comprehensive trade agreement.
Domestic auto component manufacturers will face enhanced cost pressures with Mexico hiking duties on Indian imports, according to industry body ACMA.
