Budget 2021 seen raising import duties by 5%-10% on dozens of items: Report

Three government sources familiar with the discussions told Reuters on Monday that India is considering increasing import tariffs by 5 to 10 percent on more than 50 items, including smartphones, components and electronic devices, in the budget 2021.

The sources, who asked not to be named because the discussions are not public, said the move to increase import tariffs is part of Prime Minister Narendra Modi's independent campaign in India aimed at boosting and supporting domestic manufacturing.

One source said the government has been trying to get additional revenue of around Rs 20 billion to Rs 21 billion ($ 2.7 billion to $ 2.8 billion) from the measures as it seeks to boost revenue amid the slowdown caused. for the pandemic that has shocked the economy. Two government sources also said the service increases could affect furniture and electric vehicles, which could hurt companies like Swedish furniture maker IKEA and Tesla, which plan to launch their cars in India this year.

However, officials did not specify how much of the planned walk would go to furniture and electric cars. Both Ikea and Tesla executives have previously raised concerns about the acute service structure their products are already facing in India. Three of the sources said the list of items likely to attract higher charges should include appliances such as refrigerators and air conditioners.

The Finance Ministry could not be reached by phone and did not respond to an email seeking comment.

On February 1, India's finance minister will release the government's annual federal budget for fiscal year 2021-22, which begins on April 1. Sources said the proposals may be subject to further modification before finalization.

Finance Minister Nirmala Sitharaman will release the Budget 2021 on February 1 amid the expected economic contraction of 7.7% for the current fiscal year. India in recent years has taken a series of measures that, according to industry executives, discriminate against foreign companies. Government officials say these taxes are necessary to promote India as a destination for local manufacturing and support local businesses.

"This is part of the revenue increase and atmanirbhar Bharat (self-sufficient India) plan," said a government source. Last year, India increased import taxes on a wide range of products such as footwear, furniture, toys, and electrical and electronic devices by up to 20%.

Also Read: JNPT plans to attract ₹4,000 cr investment, to generate 72,600 direct jobs