There are indications that the Indian government is wrapping up plans to increase import duties on several products. The affected items are said to be more than 50 in number and include electronics, electrical goods, chemicals and handicrafts worth around $56 billion (roughly Rs. 3,99,400 crores). As expected, imports from China will be most affected even though other countries will also be affected.
According to the report, citing a government official, India’s Finance Minister Nirmala Sitharaman may likely make the announcement when she presents her annual budget for 2020-21 on February 1, along with other stimulus measures to revive sagging economic growth.
Two government officials familiar with the matter also disclosed that the increased customs duties are expected to affect goods such as mobile phone chargers, industrial chemicals, lamps, wooden furniture, candles, jewellery and handicraft items. The government plans to increase import tariffs by 5%-10% as recommended by a panel of trade and finance ministry officials, among others.
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The move is speculated to affect smartphone manufacturers that still import chargers or other components such as vibrator motors and ringers. However, since most of the OEMs manufacture their smartphones in India, the increase have little effect on smartphone prices.
In addition, retailers such as giant IKEA that is in the process of expanding its footprint in India may also be affected. IKEA had previously identified higher Indian customs duties as a challenge.
“Our aim is to curb imports of non-essential items,” said the official, adding a 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.
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