India may raise import duties on over 50 items in budget

New Delhi: India plans to increase import duties on more than 50 items including electronics, electrical goods, chemicals and handicrafts, targeting about $56 billion worth of imports from China and elsewhere, Reuters reported, citing officials and industry sources.

Finance Minister Nirmala Sitharaman could make the announcement when she presents her annual budget on February 1, along with other stimulus measures to revive sagging economic growth, one of the government officials said.

Higher customs duties are likely to hit goods such as mobile phone chargers, industrial chemicals, lamps, wooden furniture, candles, jewellery and handicraft items, two government sources with direct knowledge of the matter said.

The move could hit smartphone manufacturers that still import chargers or other components such as vibrator motors and ringers, along with retailers such as giant IKEA that is in the process of expanding its footprint in India. IKEA had previously flagged higher Indian customs duties as a challenge.

Since taking charge in 2014, Prime Minister Narendra Modi has imposed several restrictions on imports while allowing more foreign investment in manufacturing, defense and other sectors.

Modi’s ruling Bharatiya Janata Party (BJP) has also asked the government to increase duties on non-essential items to boost local manufacturing.

The government is separately considering imposing “quality standards” on imports as less than 10% of India’s tariff lines are regulated for safety, health and environmental standards, an industry official, who is participating in the pre-budget consultations, said.

Last July, the government raised import tax on more than 75 items, including gold and automobile parts, in its post-election budget.

The United States wants India to buy at least another $5-6 billion worth of American farm goods if New Delhi wants to win reinstatement of a key U.S. trade concession and seal a wider pact, four sources familiar with the talks told Reuters.

Image courtesy of www.ians.in

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