There should be no more reduction in customs duty on manufactured goods, as the sector is already facing a slowdown due to an appreciating rupee and increase in imports, industry body Ficci said on Thursday.
?Rupee appreciation has made imports cheaper and has increased competition for the domestic manufacturing sector, which is already suffering due to slow growth in exports and high interest rates,? Ficci President Habil Khorakiwala said.
In such a scenario, it would not be appropriate to reduce customs duty on manufactured items in the coming budget as it would lead to surge in imports of such goods, he said.
Increase in interest rates has also affected demand for consumer goods and the sector witnessed its growth decelerating by 1.28% for April-September this year. The manufacturing sector performed poorly during July-September 2007, as compared to sectors like services and mining. While net sales of manufacturing sector grew by 9.2% in the quarter ended
September 2007, the growth was 24 % for services and 15% for mining.
