Unfavourable levies hit Indian manufacturing: FICCIAugust 12th, 2012 - 8:52 pm ICT by IANS
New Delhi, Aug 12 (IANS) Several industrial sectors like tyres, electronic hardware, electrical equipment and medical instruments are suffering due to an unfavourable duty structure which makes Indian manufacturing uncompetitive, a FICCI survey revealed.
According to a survey by the industrial lobby on “Inverted Duty Structure in Indian Manufacturing Sector”, imported raw material users in a range of manufacturing industry segments are in a spot due to inverted customs duty structure that makes them uncompetitive against cheaper finished product imports and discourages domestic value addition.
Under the inverted duty structure, import duty on finished products are lower than on parts or components used in manufacturing of the parts.
The FICCI survey reveals that manufacturing segments that are suffering due to inverted duty structure are: pumps for liquids, tyres, electronic hardware, electrical equipment, medical instrument, aluminium and articles, and technical textiles.
The findings of the survey assume importance as India is now a part of a number of regional or bilateral Free Trade Agreements (FTA) with many countries and groupings, including Japan, the ASEAN and South Korea. These FTAs aim to provide equal opportunity to Indian players in terms of market access.
However, the higher import duty on raw materials results in an inverted duty structure that makes certain Indian manufactured goods (those dependent on imported raw materials) uncompetitive in both domestic and export markets, the FICCI survey said.
In addition to the duty anomaly created by FTAs, the survey notes that many times importers derive the benefit of lower duty or zero duty, due to some special exemptions such as nil duty on project imports and certain defence purchases. However, domestic manufacturers are not eligible for any matching concessions to nullify the impact of such duty anomalies.
The FICCI survey recommended that domestic manufacturers should be provided a level playing field vis-ŕ-vis imports under FTAs and various duty concession schemes.
- Assocham for tax sops to promote SEZs - Apr 22, 2012
- MRF Ltd mulls overseas acquisitions - Oct 10, 2011
- ASEAN markets more accessible to Indian companies: FICCI - Sep 25, 2011
- Inverted duty structures in FTAs not good: ACMA - Aug 18, 2010
- Daimler India's Bharat Benz trucks to roll on JK Tyres - Feb 06, 2012
- Rising input costs a major worry, says industry lobby - Feb 22, 2011
- Inflation declines marginally, RBI rate cut seen (Roundup) - Apr 16, 2012
- Rising raw material cost dampening manufacturing growth: Ficci - Dec 11, 2011
- Manufacturing sector to grow 11-12 percent in April-June: Study - May 09, 2010
- Indian aviation's MRO business set to soar - Apr 08, 2012
- Relief for cinema industry as film rolls gets duty rebate - Feb 28, 2011
- Taiwanese, Chinese imports a threat for UPS makers - Feb 13, 2012
- Manufacturing sector to recover in second quarter: FICCI - Jul 21, 2009
- $2 bn aerospace, defence exports by India in 2011-12: Assocham - Jan 27, 2012
- No clear Pakistani policy on terror: Daily - Sep 05, 2012
Tags: customs duty, domestic manufacturers, duty structure, electronic hardware, export markets, ficci new delhi, finished products, free trade agreements, import duty, industrial sectors, industry segments, levies, manufacturing sector, market access, medical instrument, medical instruments, project imports, survey notes, technical textiles, value addition