The government is considering changes in the customs duty structure on more than 40 products, including electronics, chemicals, textiles and automobiles, to boost domestic manufacturing and reduce imports, sources said.
According to the sources, the finance ministry has sought inputs from various ministries and departments on the products that can be considered for duty rationalisation in the upcoming budget.
The aim is to promote the Make in India initiative and enhance the competitiveness of domestic industries, the sources added.
Some of the products that are under consideration for duty changes are:
- Electronics goods such as headphones, earphones, loudspeakers, smart meters and imitation jewellery. The government may increase the basic customs duty (BCD) on these items to discourage imports and encourage local production.
- Chemicals and petrochemicals such as denatured ethyl alcohol, naphtha, propane, butane and polyethylene. The government may reduce the BCD on these items to lower the input costs for domestic manufacturers.
- Precious metals such as gold, silver and platinum. The government may revise the BCD on these items to align them with the international prices and curb smuggling.
- Export promotion items such as leather goods, carpets, handicrafts and sports goods. The government may reduce or exempt the BCD on these items to boost exports and generate employment.
- Automobiles and auto parts such as electric vehicles, hybrid vehicles, fuel cells, lithium-ion batteries and catalytic converters. The government may reduce the BCD on these items to promote green mobility and reduce pollution.
- Capital goods such as machinery, equipment and tools. The government may reduce the BCD on these items to facilitate technology upgradation and modernisation of domestic industries.
The sources said that the final decision on the duty changes will be taken by the finance minister after considering the revenue implications and the impact on various sectors.
The government has been taking various measures to reduce the dependence on imports and promote domestic manufacturing under the Atmanirbhar Bharat vision.
In the last budget, the government had increased the BCD on more than 50 items, including mobile phones, chargers, LED lights, solar inverters and air conditioners.
The government had also introduced a health cess of 5 per cent on imports of medical devices, except those exempt from BCD.
The government had also announced production-linked incentive (PLI) schemes for 13 sectors, including electronics, automobiles, pharmaceuticals and textiles, to boost domestic manufacturing and exports.
The PLI schemes offer incentives to manufacturers based on their incremental production and sales over a period of five years.
The government expects that these schemes will attract investments of over Rs 1.97 lakh crore and generate employment for over 25 lakh people in the next five years.
The next budget will be presented by Finance Minister Nirmala Sitharaman on February 1, 2024.