In order to give a boost to “Aatmnirbhar Bharat” efforts, the Modi government is considering increasing customs duties on about 35 items in the Union Budget 2023. Some of the items on which custom duty may be raised are: private jets, helicopters, high-end electronics, plastic goods, jewelry, high-gloss paper, and vitamins, said a report in the Economic Times.
The government’s move is intended to curb imports and encourage local manufacturing of some of these products. The commerce and industry ministry had previously asked various ministries to provide a list of non-essential items whose imports should be discouraged through a tariff hike.
As per the ET report, India’s current account deficit reached a nine-year high of 4.4% of GDP in the quarter ending September, up from 2.2% of GDP in the previous quarter. Policymakers are also aiming to discourage the import of non-essential goods as part of a long-term strategy to encourage domestic production.
Import tariffs on a range of items have already been raised in recent years to support the government’s “Make in India” and “Aatmnirbhar Bharat” initiatives. Quality control orders have also been issued to curb cheap imports of non-essential goods.
According to experts, if the increase in import duties is only applied to certain finished products, it will not only increase revenue, but also encourage the Make in India initiative. “The choice of these finished products should depend on their place in the global supply chain.
Finance minister Nirmala Sitharaman is set to present the Union Budget on February 1, 2023. This would be the last full budget of the Modi government before the Lok Sabha elections in 2024.