#Budget2021: Smartphones Will Become Costly As 10% Import Duty Hike Expected For 50+ Items
In the upcoming budget, India is considering to hike import duties on more than 50 items including smartphones, electronic components and appliances by 5%-10%.
Sources told that this revision of import duties is in line with the aim to support and promote domestic manufacturing in the self-reliant India campaign started by Prime Minister Narendra Modi.
The virus has toyed with economy and brought it at cross-roads, and according to one of the sources now the government is seeking to get additional revenue of 200 billion to 210 billion rupees ($2.7 billion to $2.8 billion) in order to shore up the revenue
According to the government sources, this increase in duty hike could especially hurt electric vehicles and furniture. This may potentially affect the likes of Ikea and Tesla. This year Tesla is planning its launch in India.
Though there has been no specific hike mentioned by the officials on furniture and electric vehicles. Concerns about the steep duty structure have been raised by the executives from both the organizations, Ikea & Tesla.
Steeper Duties On Other Items:-
The other items like appliances such as refrigerators and air conditioners are also likely to attract steeper duties. The finance ministry could not be reached by telephone and did not reply to an email seeking comments.
For the 2021-22 financial year, which begins April 1, India’s finance minister will unveil the annual federal budget on February 1.
Sources said that further before the proposals are finalized, they can be tweaked.
Amid the shadow of a projected economic contraction of 7.7% for the current fiscal year, on February 1, the budget will be unveiled by Finance Minister Nirmala Sitharaman.
Industry executives have said that in the recent years, India has taken a series of measures that discriminate against foreign companies. However, government officials have maintained that such taxes are essential to promote India as a destination for local manufacturing and to support domestic businesses.
One of the government source called it a part of Atmanirbhar Bharat and revenue raising.
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%.