NEW DELHI: The government is considering increasing customs duty on close to 20 product segments including laptops, cameras, textiles and aluminum goods, while placing some steel items under import licensing, as part of its latest move to restrict imports from China.
The issue is now before the finance ministry, which had earlier spurned the proposal from the commerce and industry ministry, sources told TOI. A senior officer said that the revenue department is expected to move ahead by notifying some tariff hikes.
“It is not a China-specific duty action but an overall increase in customs duty, although the idea is o focus on products which are coming in large volumes from China,” another officer explained.
In recent weeks, the government has been wary of duty hikes as it has noticed diversion of imports from countries with which India has free trade agreements, especially Asean members such as Vietnam or Thailand. In fact, the perceived inaction by the revenue department has prompted the commerce department to impose curbs such import licensing of tyres and TV sets, which many in the government believe is turning the clock back by a few decades.
Some steel products are being considered for import restrictions by the Directorate General of Foreign Trade, which is the licensing agency.
Apart from some of the import restrictions, the Narendra Modi administration has also banned 59 Chinese apps, while shifting foreign direct investment (FDI) from China-based entities to the approval route instead of the earlier system which only required companies to inform the Reserve Bank of India post-investment. Further, a registration system has been mandated for Chinese suppliers and contractors who wish to participate in government contracts.
Government officials said that the moves are meant to clearly signal India’s displeasure at the recent intrusion in Ladakh, which has also resulted in the death of 20 Army personnel. “Even if it means higher costs, we can’t be doing business with them,” an officer said.
Separately, the government is working on promoting domestic manufacturing by offering incentives to mobile manufacturers and pharma companies producing bulk drugs, with a few
more sectors expected to be added in the coming weeks.
India has a massive trade deficit with China, which was estimated at $48.7 billion in 2019-20, the lowest in five years. The government has accused China of not responding to its requests to allow more exports from India, resulting in higher deficit.