Import duties play an important role in shaping a country’s trade policies by controlling the flow of goods across borders, supporting domestic industries, and generating revenue for the government. Beyond these functions, they also have a significant impact on inflation and overall price stability within the economy. This study explores how changes in import duties influence inflation in India, using secondary data covering the period from 2018 to 2023.

The analysis reveals that an increase in import duties leads to a rise in the cost of imported goods and essential production inputs. These higher costs are often passed on to consumers, resulting in increased prices and contributing to inflation through a cost-push effect. At the same time, higher import duties can promote domestic production and reduce reliance on foreign goods. The study concludes that although import duties can strengthen local industries, they need to be implemented carefully to prevent excessive inflation.

Keywords: Import Duties, Inflation, India, Trade Policy, Cost-Push Inflation, Price Stability