From jewellery to electronics, customs duty on 35 items may be hiked to boost domestic manufacturing

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Budget 2023: From jewellery to electronics, customs duty on 35 items may be hiked to boost domestic manufacturing

Photo : BCCL

New Delhi: In a bid to promote manufacturing in India and to curb imports of non-essential items, the Centre may announce a customs duty hike on certain items including jewellery and high-end electronic items in the upcoming budget. The government has prepared a list of over 35 items that are being analysed for a possible duty hike in Union Budget 2023-23.

The list of over 35 items that could see a customs duty hike in the budget, scheduled to be announced on February 1, includes private jets, jewellery, helicopters, plastic goods, high-end electronic items, high-gloss paper and vitamins.

“A list has been drawn up based on the inputs from various ministries that are being examined,” a government official told Economic Times. The move to raise the customs duty on these things is aimed at reducing imports along with giving a boost to local manufacturing of some of these products.

Last month, Piyush Goyal-led commerce and industry ministry had directed different ministries to come up with a list of non-essential items, the imports of which need to be discouraged through import tariff hike.

In addition to this, discouraging the imports of non-essential items is also a part of the long-term strategy of policymakers. For the last few years, India has announced an increase in customs duties on several goods in a bid to promote its Make in India initiative launched in 2014. This was aimed at subsequently supporting the Aatmanirbhar Bharat plan.

In the last budget, the Centre had raised import tariffs on a range of items including imitation jewellery, umbrellas and earphones, to provide an impetus to local manufacturing. Meanwhile, the government had last year also hiked import tariffs on gold to curtail its imports.

“Goods already being manufactured in the country are being considered,” said the official cited above.

Bringing down the imports of non-essential items is important for India as the country’s current account deficit (CAD) had jumped to a nine-year high of 4.4 per cent of GDP in the quarter ended September from 2.2 per cent of GDP in the quarter before.

The CAD is set to worsen further going forward due to the current scenario of higher imports and slower exports, Deloitte had warned in a report.

Budget Session 2023

The Budget Session of the Parliament is expected to commence on January 31, 2023 and the Union Budget for FY 2023-24 will be presented on February 1.

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