Inverted customs duty makes manufactured goods uncompetitive: FICCI
Updated: Nov 18, 2013 12:18:44pm
New Delhi, Nov 18 (KNN) Several manufacturing segments are facing inverted customs duty that is making them uncompetitive against finished product imports and at the same discouraging domestic value addition.
In a survey report submitted to the government, “nine manufacturing sectors have reported duty inversion and these sectors are Aluminium products, Capital Goods, Cement, Chemicals, Electronics, Paper, Steel, Textiles and Tyres,” the Federation of Indian Chambers of Commerce and Industry (FICCI) said.
The findings are based on a recent survey on inverted duty structure in Indian manufacturing sector conducted by FICCI.
The survey has been submitted to respective sectoral Ministries, Tariff Commission, National Manufacturing Competitiveness Council (NMCC), Department of Industrial Policy and Promotion (DIPP) and Planning Commission for necessary action.
It showed that India is now a part of a number of regional and bilateral Free Trade Agreements (FTA) like India-Japan, ASEAN, India-South Korea etc.
FTAs were supposed to provide equal opportunity to Indian players in terms of market access but the higher import duty on raw materials has resulted in inverted duty structure in certain segments that makes Indian manufactured goods (those dependent on imported raw materials) uncompetitive in domestic markets.
In addition to the duty anomaly created on Most Favoured Nation (MFN) basis (implying that duty inversion in general custom duty structure), the survey noted that many a time inverted duty is caused by FTAs also. (KNN/ST)
In a survey report submitted to the government, “nine manufacturing sectors have reported duty inversion and these sectors are Aluminium products, Capital Goods, Cement, Chemicals, Electronics, Paper, Steel, Textiles and Tyres,” the Federation of Indian Chambers of Commerce and Industry (FICCI) said.
The findings are based on a recent survey on inverted duty structure in Indian manufacturing sector conducted by FICCI.
The survey has been submitted to respective sectoral Ministries, Tariff Commission, National Manufacturing Competitiveness Council (NMCC), Department of Industrial Policy and Promotion (DIPP) and Planning Commission for necessary action.
It showed that India is now a part of a number of regional and bilateral Free Trade Agreements (FTA) like India-Japan, ASEAN, India-South Korea etc.
FTAs were supposed to provide equal opportunity to Indian players in terms of market access but the higher import duty on raw materials has resulted in inverted duty structure in certain segments that makes Indian manufactured goods (those dependent on imported raw materials) uncompetitive in domestic markets.
In addition to the duty anomaly created on Most Favoured Nation (MFN) basis (implying that duty inversion in general custom duty structure), the survey noted that many a time inverted duty is caused by FTAs also. (KNN/ST)
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