In A Thrust For “Make In India”, Govt To Curb Imports Of Over 350 Items

The government has identified over 350 “non-essential” imports — ranging from toys and textile products to footwear and electronic goods — on which it intends to initiate a host of measures, including an increase in customs duty apart from putting in place quality control orders to reduce shipments into the country and encourage domestic manufacturing. The government might announce import duty hikes on some products in the budget.

The government is looking to reduce imports of more than 350 “non-essential” items such as toys, textiles, footwear and electronic goods to give the Make in India initiative a push. Several ministries, including textiles, electronics and IT and commerce and industry, have been asked to take action on the list of identified products. Electronic goods form a bulk of India’s trade deficit. The government is of the view that increasing import duties on products such as television sets and mobile phones would give a boost to domestic manufacturing. As per the officials this was due to India signing the World Trade Organization’s Information Technology Agreement, which permits duty-free import of several electronics goods. The government is also considering investments from international companies to set up manufacturing facilities in India.

As part of the initiative, public sector companies may also be asked to list out their requirement for products and specifications for the next five-six years so that domestic industry knows the demand and plan accordingly. The moves are part of the government’s thrust to ‘Make-in-India’ scheme, on which it has been working on ways to discourage imports. Going forward, the government intends to pursue the plan vigorously and first up will be a quality control order for toys, such as dolls. Some of the duty hikes are expected to be announced in the budget, although officials are not ruling out mid-term correction.

Several economists have, however, warned against using high import duties as a tool to restrict imports, arguing that it impacts the consumer adversely, who has to shell out more. Besides, inefficient domestic manufacturers get protection. S&A reached out to some of the major players in the footwear industry to share their views on the decision.

DO YOU THINK INCREASE IN CUSTOMS DUTY ON FOOTWEAR WILL BOOST MAKE IN INDIA?