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Government has increased customs duty on total 19 categories of “non-essential items” .
Why in the news ?
- Government has increased customs duty on total 19 categories of “non-essential items” .
- Items include washing machines, refrigerators, radial tyres, and aviation turbine fuel (ATF) that saw an import of around Rs 86,000 crore in 2017-18.
- The hike in customs duty on these items will be effective from 27 September.
More in the news
- The decision to hike tariffs is taken to curb import of certain imported items to narrow down the current account deficit (CAD).
- The import duty on air conditioners, washing machines having less than 10 kg capacity and household refrigerators has been hiked from 10% to 20%.
- The government has also imposed an import duty of 5% on ATF from nil earlier.
- All footwear categories except parts of footwear, heel cushions, gaiters and removable in-soles saw their import duty increase from 20% to 25%.
- Earlier Finance Minitser had said that the government would take steps to promote exports and restrict non-essential imports.
Other view
- Analysts are of the view that the move is unlikely to have any significant impact on curtailing the size of the CAD in 2018-19.
- For instance, in 2017-18, ATF imports were 0.03 per cent of total imports in value terms (in US dollar).
- Import of washing machines of less than 10 kg and radial tyres are other categories where volumes are limited.
- As per some experts, the increase in duty on imports with the already depreciating rupee would be quite a point of worry for the importers.
- However, this hike in duty may not impact importers who procure from countries, with which India currently has beneficial free trade agreements.
Data
- According to statistics released by the WTO in July, the share of India in total world merchandise exports was 1.68 per cent in 2017, a level it has more or less maintained since 2011.
- Imports increased from 0.77 per cent in 2001 to 2.51 per cent in 2011.
Source
The Hindu, Indian Express.