Customs duty changes in Budget will promote Make in India initiative: GTRI
New Delhi: Customs duty changes for several products such as precious metals, small cars, bicycles, toys and telecommunication components in the Budget will help promote the Make in India initiative of the government, said economic think tank GTRI on Friday. The Global Trade Research Initiative (GTRI) also said that the import duty changes in Union Budget 2023-24 affect products that count for less than USD 14 billion or two percent of the value in India's current import basket.
'A large part of the Budget exercise was devoted to reducing the number of duty slabs & exemptions'
"A large part of the Budget exercise was devoted to reducing the number of duty slabs and exemptions. The government continued with the current import duty structure, making changes only when it has big reason to do so. This will allow the firms to think long-term," said GTRI co-founder Ajay Srivastava.
Combined imports value for products where duty was raised is USD 12 bn: Srivastava
Customs duty changes fall into four broad groups including, duty hike, duty reduction, correcting inverted duty structure, and reducing the number of duty slabs. Srivastava said that the combined imports value for products where duty was raised is USD 12 billion or 1.6 percent of India's total merchandise imports in 2022. Import duty was hiked on a number of goods including silver bars and dore bars, styrene, vinyl chloride, naphtha, gold jewellery, small cars, bicycles, and toys.
Goods on which the duty was reduced include palladium tetra amine sulphate for the manufacture of parts of connectors, fish feed to support domestic manufacture of shrimp feed, fish meal, fish lipid oil, ethyl alcohol for use in ethanol blending programme, camera lens for mobile phone, parts for the manufacture of open cells of TV panels, machinery for the manufacture of lithium-ion cells for batteries used in electric vehicles.
'The Budget also rectified the inverted duty structure for electric kitchen chimneys'
The Budget also rectified the inverted duty structure for electric kitchen chimneys by bringing duties on inputs and output at the same level. "Effective duty on electric kitchen chimney increased from 7.5 percent to 15 percent. Effective duty on heat coils used in the manufacture of electric kitchen chimneys decreased from 20 percent to 15 percent," GTRI said. It added that basic customs duty slabs on goods other than textiles and agriculture have been reduced from 21 to 13.
Reducing the number of duty slabs without changing the final duty was most crucial exercise: GTRI
"This was the most crucial exercise undertaken in this Budget. Reducing the number of duty slabs without changing the final duty required rearranging effective duty and AIDC (Automatic identification and data capture) components," GTRI said. The think tank had suggested slashing the number of slabs in its pre- Budget recommendation.
Saloni Roy, Partner, Deloitte India, too said that Finance Minister Nirmala Sitharaman has announced customs measures towards priorities of the government to promote mobility, sustainability and green energy, domestic value addition in the manufacturing sector, exports and better customs administration.
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