The Centre has indicated that it may increase import duties on as many as 50 items as the administration goals to revive the crumbling state of the Indian economy. The revelation comes ahead of the Budget 2020 which will be presented by Finance Minister Nirmala Sitharaman on February 1. The government targets to generate around $56 billion worth of imports especially from China, according to news report.
“Our aim is to curb imports of non-essential items,” said an official, who wished anonymity. He further added that the hike in import duties would provide a level playing field for local manufacturers – hit by cheap imports from China, the Association of Southeast Asian Nations (ASEAN), and other countries that enjoy trade pacts with India, the report revealed. As International Monetary Fund (IMF) trims India’s growth projection, Finance Minister may announce an increase in customs duties on items including chemicals, handicrafts, jewellery, wooden furniture, electronic goods among others.
The move might impact smartphone manufacturers who import chargers or other components for assembling such as vibrator motors and ringers. The decision of increasing customs duties could also jeopardise the plan of tech companies like IKEA, who wished to expand their footprints in South-Asian sub-continent. IKEA had previously flagged higher Indian customs duties as a challenge.
The government might hike 5-10% on tariff duties on imported products, as per sources. Last year in July, the government increased the import tax on more than 75 items, including gold and automobile parts, in its post-election budget. India’s goods imports, which had been growing faster than exports in the last several years, fell some 8.90% during the April-December period from year-earlier levels, compared to a roughly 2% decline in exports.