The budget 2021 is near and the budget planning can be seen quite distinctly. In the upcoming budget, India is contemplating a rise in the import duties by about 5%-10% on more than 50 items. These items will include products like smartphones, electronic components and appliances, as per the reports.
The thought process behind this suspected rise in import duty is in accordance with the Prime Minister, Narendra Modi’s self-reliant India campaign. Aiming to promote and support domestic manufacturing, this move will be advantageous, as per the sources.
Allegedly the government was looking to target an additional revenue of approx. 200 billion to 210 billion rupees ($2.7 billion to $2.8 billion) by this with a view to support revenue flow between the pandemic-driven slowdown that has injured the economy.
There are also talks that an increase in the duty, the consequence of which could be seen on furniture and electric vehicles. This could potentially hurt companies like the Swedish furniture maker Ikea and Tesla, which a few days back registered its Indian subsidiary in Bangalore and is planning to launch its cars in India this year.
Though the percentage of hike on duty of furniture and electric vehicles are not yet known. But Ikea and Tesla executives have already indicated concerns regarding the duty structure their products have been facing in India already.
The other items that might attract sharp duties will include appliances like refrigerators and air conditioners as well.
Currently, the finance ministry is in the no comment mood and haven’t given any clarifications yet. The federal budget for the financial year 2021-22, which will commence from April 1st, is all set to be unveiled on February the 1st. Before the final unveiling the budget will undergo certain changes.
Our Finance Minister, Nirmala Sitharaman will disclose the budget on Feb. 1 among the projection of economic contraction of 7.7% for the current fiscal year.
A lot of measures have been taken by India in recent years which discriminate against foreign companies. Our Government officials said that these taxes are essential inorder to promote made- in- India and to promote local manufacturing and support domestic businesses.
In comparison with last year, the jump in India’s import taxes on products such as footwear, furniture, toys, electrical and electronics items was up to 20%.