Union Budget 2020 India: The government on Saturday increased customs duty on several products, including toys, footwear and furniture items, with a view to promote ‘Make in India’ and boost domestic manufacturing.
Customs or import duty on footwear has been increased from 25 per cent to 35 per cent and on parts of footwear to 20 per cent from 15 per cent.
Similarly, on toys like tricycles, dolls, and puzzles of all kinds, the duty has been hiked to 60 per cent from 20 per cent at present.
On furniture goods such as seats, mattress support, articles of bedding, and lamps and lighting fittings, the import duty has been increased to 25 per cent from the current 20 per cent.
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“Labour intensive sectors in MSME are critical for employment generation. Cheap and low-quality imports are an impediment to their growth,” Finance Minister Nirmala Sitharaman said in her Budget speech.
She said that special attention has been taken to put measured restraint on import of those items which are being produced by our MSMEs with better quality.
“Keeping in view the need of this sector, customs duty is being raised on items like footwear and furniture,” she added.
The Commerce and Industry Ministry in its pre-Budget recommendations to the Finance Ministry had proposed rationalisation of basic customs or import duty on over 300 items from different sectors.
“There is a significant increase in imports of undervalued and cheap footwear. Hike in the duty will help address the issue of price competition. Majority of imports are coming from ASEAN countries, with which India has a free trade agreement. It is also suspected that China is re-routing large quantities of footwear through these countries,” an official had said.
Import of these toys increased to USD 304 million in 2018-19 from USD 281.82 million in 2017-18 from China and Hong Kong.
Trade Promotion Council of India (TPCI) Chairman Mohit Singla said the hike in duty on furniture is a “great move” by the government which will provide impetus to domestic manufacturers to augment ‘Swadeshi’ products.
“This move will allow Indian furniture products to find space in the global retail shelf and also meet the burgeoning domestic demand by leveraging its potential,” Singla said.
He added that despite the rich geographical diversity, technical know-how and ample availability of skills, the domestic industry could not so far tap the latent opportunity.
“The restrictions in imports by enhancing custom duties will lead to the level playing field where the domestic companies can now compete at global platforms,” he said.