Rising India Import Duties Could Impact Retailers, Smartphone OEMs

India trade

Increased custom duties on imports in India are likely to affect upwards of 50 items, such as electronics, according to a report by Reuters.

Handmade items like furniture, candles and jewelry along with chemicals are expected to be affected as well, with the new duties potentially affecting $56 billion worth of imports from countries like China and other places.

The announcement for the new rates are expected to come during Finance Minister Nirmala Sitharaman’s annual budget presentation on Feb. 1, for the period of 2020 through 2021. The measure is intended to help local businesses and give a boost to the economy. 

Imported mobile phone chargers will likely be hit too, as well as other imported smartphone components like vibrating motors and ringers. Furniture retailer IKEA will be affected, even as it attempts to get a larger foothold in the country.

A panel of officials in trade and finance decided to increase tariffs by 5 to 10 percent after they identified items to target, according to the report.

“Our aim is to curb imports of non-essential items,” said one official. The goal was to create a level playing field for locals that were affected by cheap Chinese imports.

Prime Minister Narendra Modi, who came to power in 2014, has been steadily putting restrictions on imports while letting foreign countries invest in other things like defense, manufacturing and other fields.

Modi’s ruling Bharatiya Janata Party (BJP) has also requested that the government up duties on non-essential items, in an attempt to energize local manufacturing.

“We expect the budget will address the issue of ... cheap imports under free trade pacts,” said Gopal Krishan Agarwal, the head of BJP’s Economic Affairs Cell.

In a separate issue, the Indian government is also looking into tacking on “quality standards” on imports, as well as a Border Adjustment Tax to help compensate for local companies who have to pay Indian taxes and for things like electricity and fuel.



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