Tuesday, August 06, 2013: In order to curb rising import bill, the Indian government is considering to increase the duty on electronic goods and components. Importers will have to pay 5 per cent more on imported electric gear. Presently, they are paying 21 per cent as tax. This decision is being made with a view to help local manufacturers so that they get a level-playing field to grow their business.
The recent trend points to the fact that import of electronic gears would exceed oil imports by 2020 indicating an import of $300 billion.
It is also necessary because of the widening gap in dollar being spent on imports and earnings received from exports. Moreover, the gap in foreign investment flows is also widening, leading to devaluation of rupee.
Imports of fully built mobile phones or laptops will be discouraged so that manufacturers are forced to assemble these in India itself. Progressive duties will be levied on components so that manufacturers shift base to India.
In addition to this, India wishes to manufacture more equipment for power plants. To fulfill this objective, it will be making a change in the policy that pertains to western gear makers like Siemens, Babcock and Chinese giants like Shanghai Electric so that they are compelled to manufacture their components in India.
