India is considering hiking
importduties
by
5%-
10%
on more than 50
items including smartphones, electronic components and appliances in the upcoming
budget, three government sources privy to the discussions told Reuters
on Monday.
The move to increase
import
duties is part
of Prime Minister Narendra Modi’s self-reliant India campaign that aims to promote and support domestic manufacturing, said the sources, who asked not to be named as the discussions are not public.
One
of the sources said the government was seeking to target additional revenue
of about Rs 200 billion to 210 billion ($2.7 billion to $2.8 billion) from the moves, as it looks to shore up revenue amidst the pandemic-driven slowdown that has stung the economy.
Two
of the government sources also said the duty hikes could impact furniture and electric vehicles, potentially hurting the likes
of Swedish furniture maker Ikea and Tesla, which is planning to launch its cars in India this year.
The officials, however, did not specify how much
of a hike was planned
on furniture and electric vehicles.
Both Ikea and Tesla executives have previously expressed concerns about the steep duty structure their products already face in India.
The list
of
items likely to attract steeper
duties is set to include appliances such as refrigerators and air conditioners too, three
of the sources said.
The finance ministry could not be reached
by telephone and did not reply to an email seeking comments.
India‘
s finance minister will
on Feb. 1 unveil the government’s annual federal
budget for the 2021-22 financial year, which begins April 1.
The sources said the proposals may still be tweaked further before they are finalised.
Finance Minister Nirmala Sitharaman will unveil the
budget
on Feb. 1 amid the shadow
of a projected economic contraction
of 7.7% for the current fiscal year.
India has in recent years taken a series
of measures that industry executives say discriminate against foreign companies. Government officials say such taxes are essential to promote India as a destination for local manufacturing and to support domestic businesses.
“This is part
of revenue
raising and Atmanirbhar Bharat (self-reliant India) plan,” said one
of the government sources.
Last year, India raised
import taxes
on a wide range
of products such as footwear, furniture, toys, electrical and electronics
items
by up to 20%.
