Report of the Indian Tariff Board regarding the Grant of Additional Protection to the Cotton Textile Industry

One of the most important is the world wide economic depression which commenced in the latter part of 1929 and has had the effect of curtailing to a large extent the purchasing power of the average consumer. [...] The reduction in the costs of manufacture of the Indian industry is one of the subjects which is being examined in the regular enquiry now in progress and our conclusions must therefore await the results of that investigation. [...] We must assume that this measure of protection was suggested with reference to the prices of imported piece-goods then current ; to the extent that fluctuations in these prices follow movements in the level of foreign exchanges and in the prices of raw cotton a comparison of the present level of foreign exchanges and the present price of raw cotton with those prevailing at the time of the introduc [...] We desire to make it clear that we have taken a rate of 136.6 as our standard of comparison not necessarily for the reason that it approximates to the gold parity but because it happens to be the ratio of exchange on which the prices intended for the Indian industry by the Government and the Legislature at the time of the grant of protection were based. [...] During the period covered by our proposals therefore the low rupee value of the yen currency is likely to operate to the advantage of Japan in the Indian market without the usual adverse incidents of a low exchange and no deduction should therefore be made from the measure of additional protection necessitated by the fall in exchange.