Budget 2020: The government can increase customs duty on more than 50 products, buying will be expensive

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Summary

A budget may be announced to encourage domestic traders

Government's eye on 56 million dollar imports from China and other countries

Detailed

Intending to stimulate the domestic economy, the Government of India plans to increase import duty on 50 products including electronics, electrical goods, chemicals, and handlooms, keeping in mind the $ 56 billion import from China and other countries. Giving this information, official and industry sources said that Finance Minister Nirmala Sitharaman is likely to announce this in the General Budget 2020-21, to be presented on February 1.

Government sources said that products such as mobile phone chargers, industrial chemicals, lamps, furniture, candles, jewelry, and handloom items are among the highest customs duties. This move of the government could give a major blow to the smartphone makers, who are still importing other products like charger or vibrator motor and ringer. At the same time, the duty on the furniture will affect the company like global retailer IKEA, which is going through the process of expansion in India. IKEA has already expressed concern over the high customs duty imposed in India.

He said that the government has identified such products and a decision of 5-10 percent import duty has been taken on them. It has already been recommended by a committee of officials of the Ministry of Trade and Finance. "We aim to limit the import of non-essential products," an official said. The increase in excise duty will help domestic traders to compete with cheaper imports from China, ASEAN, and other countries.

Infrastructural reforms to overcome lethargy: Das

A week before the budget, RBI Governor Shaktikanta Das called for structural reforms and greater financial incentives to increase consumer demand and accelerate growth. He said that monetary policy has its limits to achieve these objectives. The Narendra Modi government is going to present the first full term of its second term on Saturday at a time when the GDP growth rate is expected to reach an 11-year low.