“Measures have been taken for providing a level-playing field to our domestic manufacturers, particularly the MSME sector … The provisions for checking dumping of goods and imports of subsidized goods are also being strengthened for ensuring a level-playing field for domestic industry,” the FM said in her Budget speech.
In the near term this means the price of imported daily-use items such as shelled walnuts, peanut butter, shavers, hair dryers, table and kitchenware, footwear, kids toys and even electric cars and two-wheelers will rise as the customs duty on these and many more have been increased (see table) quite substantially. The hikes could range from a few hundred rupees in case of certain items to well over thousands for items like an electric cars and bigger green buses.
“Labour intensive sectors in MSME are critical for employment generation. Cheap and low-quality imports are an impediment to their growth,” the FM said.
The localisation drive was also strengthened on the high-volume mobile phones category where components such as printed circuit boards, fingerprint scanners, display panels, and ringers also saw the import duty go up. However, industry players said that prices would not see much of an impact as investments are already underway for making them here. “This is in line with the phased manufacturing plan (PMP) and we don’t expect any major impact on retail prices,” said Pankaj Mohindroo, president of India Cellular and Electronics Association (ICEA).
Panasonic India MD Manish Sharma said products such as hair dryers, shavers, and trimmers could now be made in India as companies take steps to cut costs.
On the electric vehicles category, companies are not happy with the customs hike as they feel that it has come in too early as local suppliers are yet to firm up. “We feel that the customs duty hike on electrics assembled in India is a bit harsh, as this may impact the nascent category which was beginning to expand off late,” Rajeev Chaba, MD of MG Motors India (which launched ZS electric), said.