Customs hike to hit $65 billion imports, may lead to WTO dispute
New Delhi: The government's decision to increase import duty on a number of products will impact at least $65 billion worth of imports, and could even land the country in a trade dispute at the World Trade Organisation (WTO), experts say.
The Union Budget has proposed higher customs duty on goods including mobile phones, completely or semi-knocked down automobile parts, electronics, capital goods, edible oils, footwear, imitation jewellery and juices, whose imports in the
first seven months of this fiscal are valued at more than $38.3 billion. Higher import duties are intended to discourage imports from China and propel the Make in India mission forward, and domestic manufacturers have welcomed them.
"We are delighted that duties have been increased," said Vinnie Mehta, director general at Automotive Component Manufacturers Association of India.
"The industry is extremely competitive in these areas and this measure will not only encourage investments but also encourage technology development in these areas," he said.
Duty on auto components like engine & transmission parts, brakes, suspension, gear boxes and airbags has been increased to 15% from 7.5% in the case of some products and from 10% in the case of other. These items account for more than 50% of $43.5 billion domestic component industry's turnover and over 30% of its $11 billion exports. In the case of electronics, the country imported goods worth $4.6 billion in December alone, posting almost a 20% rise on year.
Experts said the move to increase import duty will only have a marginal impact on sales. "The rise in customs duties will not have a major negative impact on sales or the customer," said Arvind Singhal, chairman at Technopak Advisors. "Taxes have been increased for items which don't have a huge market size and whose local substitutes are available."
India imported goods worth $257.52 billion in the April-October period and $384.35 billion in 2016-17.
By increasing import duties, the government has provided an arbitrage for domestically produced and imported goods, Singhal said. "There will not be an overall decline in the mobile phone market. In fact, high customs will encourage more indigenisation," he said.
Import duty on mobile phones is proposed to be raised to 20% from 15%, while
import duty on some mobile phone parts and accessories and certain parts of TVs are being increased to 15%. Pankaj Mohindroo, president of the Indian Cellular Association, said about 81% of mobile phones sold in India are made locally.
TRADE DISPUTE
The decision to increase import duty on mobile phones, however, could land India in trouble in the World Trade Organisation because under the Information Technology Agreement (ITA), signatories can't impose ..
Read more at:
//economictimes.indiatimes.com/articleshow/62784304.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
New Delhi: The government's decision to increase import duty on a number of products will impact at least $65 billion worth of imports, and could even land the country in a trade dispute at the World Trade Organisation (WTO), experts say.
The Union Budget has proposed higher customs duty on goods including mobile phones, completely or semi-knocked down automobile parts, electronics, capital goods, edible oils, footwear, imitation jewellery and juices, whose imports in the
first seven months of this fiscal are valued at more than $38.3 billion. Higher import duties are intended to discourage imports from China and propel the Make in India mission forward, and domestic manufacturers have welcomed them.
"We are delighted that duties have been increased," said Vinnie Mehta, director general at Automotive Component Manufacturers Association of India.
"The industry is extremely competitive in these areas and this measure will not only encourage investments but also encourage technology development in these areas," he said.
Duty on auto components like engine & transmission parts, brakes, suspension, gear boxes and airbags has been increased to 15% from 7.5% in the case of some products and from 10% in the case of other. These items account for more than 50% of $43.5 billion domestic component industry's turnover and over 30% of its $11 billion exports. In the case of electronics, the country imported goods worth $4.6 billion in December alone, posting almost a 20% rise on year.
Experts said the move to increase import duty will only have a marginal impact on sales. "The rise in customs duties will not have a major negative impact on sales or the customer," said Arvind Singhal, chairman at Technopak Advisors. "Taxes have been increased for items which don't have a huge market size and whose local substitutes are available."
India imported goods worth $257.52 billion in the April-October period and $384.35 billion in 2016-17.
By increasing import duties, the government has provided an arbitrage for domestically produced and imported goods, Singhal said. "There will not be an overall decline in the mobile phone market. In fact, high customs will encourage more indigenisation," he said.
Import duty on mobile phones is proposed to be raised to 20% from 15%, while
import duty on some mobile phone parts and accessories and certain parts of TVs are being increased to 15%. Pankaj Mohindroo, president of the Indian Cellular Association, said about 81% of mobile phones sold in India are made locally.
TRADE DISPUTE
The decision to increase import duty on mobile phones, however, could land India in trouble in the World Trade Organisation because under the Information Technology Agreement (ITA), signatories can't impose ..
Read more at:
//economictimes.indiatimes.com/articleshow/62784304.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
