Last Updated: January 09, 2023, 10:41 IST
The government is examining to hike customs duty on more than 35 items in the upcoming budget, which is scheduled to be announced on February 1, according to an Economic Times report. It added that the Centre has prepared the list of these items, which include private jets, helicopters, jewellery, vitamins, high-end electronic items, plastic goods, and high-gloss paper.
“A list has been drawn up based on the inputs from various ministries that are being examined,” according to the ET report quoting a government official. The move will help cut imports and encourage local manufacturing of some of these products.
In December, the commerce and industry ministry had asked various ministries to prepare a list of non-essential items, imports of which needs to be discouraged through an import tariff hike.
Meanwhile, the commerce ministry has also sought a reduction in the import duty on gold in the budget with a view to push exports and manufacturing of the gems and jewellery sector, according to a recent PTI report quoting sources.
The government had in July this year hiked gold import duty to 15 per cent from 10.75 per cent to rein in the country’s current account deficit (CAD) and rising import of the yellow metal. The basic customs duty on gold is 12.5 per cent. Along with the agriculture infrastructure development cess (AIDC) of 2.5 per cent, the effective gold customs duty will be 15 per cent.
“As the gems and jewellery industry has recommended the commerce ministry for a cut in the duty, the commerce ministry has urged the finance ministry for the same. The ministry has also asked for tweaking import duty on certain other products to boost manufacturing and exports,” the PTI report quoted the sources as saying.
During April-November 2022, the merchandise trade deficit for April-November 2022 has increased to $198.35 billion as against $115.39 billion a year ago.
Exports rose 11 per cent to $295.26 billion as against $265.77 billion in the same month last year. Imports however increased 29.5 per cent to $493.61 billion during the eight months period of this fiscal. It was $381.17 billion during April-November 2021.
India’s current account deficit (CAD) widened to 4.4 per cent of the GDP in the September 2022 quarter, compared with 2.2 per cent GDP in the previous quarter, due to a higher trade deficit. Underlying the CAD in Q2FY23 was the widening of the merchandise trade deficit to $83.5 billion from $63 billion in Q1FY23 and an increase in net outgo under investment income.
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