Boosting 'Make-In-India’ process

Wednesday 05th February 2020 04:36 EST
 
 

The government has clearly signalled that it’s willing boost ‘Make in India’. Boosting localisation in consumer categories is a priority from a policy perspective as protecting the domestic industry from low-cost imports, much of it from China, is seen as a positive for local players. It would also help boost employment, an imperative in poor job environment.

“Measures have been taken for providing a level playing field to our domestic manufacturers, particularly the MSME sector… The provisions for checking dumping of goods and imports of subsidised goods are also being strengthened for ensuring a level-playing field for domestic industry,” the FM said.

In the near term, this means the prices of imported daily-use items such as shelled walnuts, peanut butter, shavers, hair dryers, table & kitchenware, footwear, kids’ toys and even electric cars and two-wheelers will rise as the customs duties on these and many more have been increased quite substantially.

The hikes could range from a few hundred rupees in case of certain items to well over thousands for items like electric cars and bigger green buses. “Labour-intensive sectors in MSME are critical for employment generation. Cheap and low-quality imports are an impediment to their growth,” the FM said.

The localisation drive was also strengthened in the high-volume mobile phones category where components such as printed circuit boards, fingerprint scanners, display panels, and ringers saw import duty go up. Industry players said prices would not see much of an impact as investments are already under way for making them here. “This is in line with the phased manufacturing plan (PMP) and we don’t expect any major impact on retail prices,” said Pankaj Mohindroo, president of India Cellular and Electronics Association (ICEA).

Panasonic India MD Manish Sharma said products such as hair dryers, shavers, and trimmers could now be made in India as companies take steps to cut costs. On electric vehicles, companies are not happy with customs hike as they feel that it is too early as local suppliers are yet to firm up.

Imported e-cars, stationery, toys, furniture to cost more

The government announced one of the biggest-ever increases in customs duty on close to 100 product categories ranging from the humble comb and padlock to precious metal coins, apart from electrical goods, footwear and furniture, as it sought to clamp down on “non-essential” imports.

While it will push up the prices of several items, including toasters, sneakers and fans, the move is meant to help small businesses, many of which are complaining of being adversely impacted by cheap imports from China. The import duty on toys, including dolls, games and tricycles, is proposed to be trebled to 60%.

Several stationery products and adapters will also see a tariff hike. The government has also reduced import tariffs on several inputs and components, such as unassembled solar cells and open cell for TV sets, as part of a push for local manufacturing of finished products. Besides, import of electric vehicles, in completely built form or in semi-knockeddown state, as well as completely built commercial vehicles are being discouraged.

The Centre has promised to refund electricity duty and VAT on fuel, along with other state and central levies. FM Nirmala Sitharaman also announced steps for the manufacture of mobile phones, electronic equipment and semi-conductor packaging in the country, which are seen to be critical to the growing import of electronic goods.


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