Import duty changes in Budget 2023 affect 2% of Indian imports in value terms: GTRI report1 min read . Updated: 05 Feb 2023, 06:39 PM IST
- The changes in customs duty make up for less than $14 billion or 2% of the value in India's current merchandise import basket
NEW DELHI : The raft of import duty changes in the Union Budget 2022-2023 will affect products that account for less than 2% of value in India’s current import basket, allowing firms to chart out long term strategies, according to a note by think-tank Global Trade Research Institute (GTRI).
“The changes in customs duty make up for less than $14 billion or 2% of the value in India's current merchandise import basket. This includes products where duty was increased or reduced… This will allow the firms to think long-term," said Ajay Srivastava, co-founder, GTRI.
He added that the government continued with the current import duty structure, making changes only when it has big reason to do so.
The combined value of imports of products where duty was raised in the Union Budget presented on Wednesday stands at $12 billion or 1.6% of India's total merchandise imports in 2022. For example, duty on silver bars and Silver dore bars, with $6.6 billion worth of imports in 2022 saw duty increased from 6.1 and 7.5% respectively to 10%. Gold jewelry with imports worth $950 million saw duty increased from 20% to 25%. Small cars, accounting for imports worth $390 million saw duty increased from 60% to 70%. Similarly, toys making up for $58 million worth of imports saw duty increased to 70% from 60%.
Combined imports value for products where duty was reduced is $2 billion or 0.27% of India's total merchandise imports in CY 2022, according to the note. The duty on camera lens for mobile phone was reduced from 2.5% to zero, to support mobile phone manufacturing.
Parts for the manufacture of open cells of TV panels saw duty reduced from 5% to 2.5%.
“Seeds for use in the manufacture of rough lab-grown diamonds to help India get a toehold in this new sector saw duty reduced from 5% to zero," said the note.
The budget also rectified the inverted duty structure for electric kitchen chimneys by bringing duties on inputs and output at the same level.
The effective duty on electric kitchen chimney was increased from 7.5% to 15%. The effective duty on heat coils used in the manufacture of electric kitchen chimneys decreased from 20% to 15%.