India Raises Tariffs on Electronics to Curb Surging Imports

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Manish Sharma, President CEAMA and President and CEO, Panasonic India and South Asia said, "This shall not lead to major price hike as the duty structure for local manufacturing remains unchanged, but will boost indigenous manufacturing & generate more employment opportunities". These include electronic items like televisions, mobile phones, projectors and water heaters.

The tax on import of microwave ovens too has been doubled to 20 per cent, the Finance Ministry said in a notification.

Even customs duty on video recording equipment and television cameras has gone up from 10 percent to 15 percent.

Customs duty on microwave ovens and LED lamps has been increased to 20 per cent from 10 per cent, while that on electricity meters has been raised to 15 per cent from 10 per cent.

To reverse this trend the government wants to work in taxation changes to make the imports of fully built mobile phone costlier.

The drive to start taxing electronic goods and their parts used in low-value screwdriver assembly came after India realised that electronics was the third largest component of its rising import bill after gold and oil.

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"It is a good move, since there was a clear indication that feature phones were being dumped in India and the government's concern and response is reflected in this", said Pankaj Mohindroo, founding national president of Indian Cellular Association. Eight out of 10 phones sold in 2017 have been made locally, data from Counterpoint Research showed.

Tarun Pathak, an associate director at Counterpoint Research, said the tax notification, will impact mobile phone companies dependent on imports.

Sources in the Finance Ministry said more such measures would be undertaken soon to ensure there is parity in domestic manufacturing and imports, especially among manufactured goods.

"Domestic and some China-based manufacturers will not be affected as majority are assembly a lot in the country, including South Korean giant Samsung".

However, the government's move would help Apple and other manufacturers make in India and maximise profits in India's $10-billion smartphone market.

India's electronic imports grew 31 per cent to $29.8 billion between April and October from a year earlier - the steepest increase after the shipments of ores and gems.

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