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Out Of $65 Billion Imports, Country To Get Additional Tax Out Of It

The decision to increase import duty on many products will affect the import of $65 Billion and this could lead to a dispute with the country’s World Trade Organization (WTO).

In the budget, there is a proposal to increase import duty on mobile phones, complimentary or semi-assembled down automobile parts, electronics, capital goods, edible oil, footwear, imitation jewelry, and juice. In the first seven months of the current financial year, the import value of these products was $38.3 Billion.

Out Of $65 Billion Imports, Country To Get Additional Tax Out Of It

The purpose of enhancing import duty is to reduce imports from China and to move ahead in the Make in India mission. The country’s manufacturers have welcomed this decision.

The Automotive Component Manufacturers Association of India, Director General Vini Mehta said, “We are happy with the increase in duty. Competition is very high in the industry and this step will encourage investment in these areas as well as technology development.

Duty on engine and transmission parts, brakes, suspension, gearbox, and the airbag was earlier 7.5–10%, which has now been increased to 15%. In the $43.5 Billion component industry, the share of these items is more than 50% and the industry’s exports exceed 30% which makes up to $11 Billion.

In December, the country had imported $4.6 Billion electronic products, which is about 20% more than the same month last year. Experts say that import duties will have a small impact on sales. Technovac Advisors Chairman Arvind Singhal said, “Customs duty will not have any major negative impact on sales or customer. Most of the tax has been increased on items which do not have too much market size and local options are available.”

India imports goods worth $257.52 Billion in April–October last year and $384.35 Billion in 2016–17.

Singhal said that the government has benefited the goods being produced in the country by enhancing import duty. They said that there will be no major drop in the mobile phone market. Due to the addition of customs duty, the use of parts made in India will increase.

There is a proposal to increase import duty on mobile phones from 15% to 20%. Duty has been increased to 15% in some parts of some mobile parts and television. Pankaj Mohindroo, President of Indian Cellular Association, said that out of the mobile phones sold in India, 81% are made in India.

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