The Government will soon undertake a comprehensive assessment of customs duties on key inputs for manufacturing of finished products including garments and leather goods to enhance cost competitiveness in both domestic and overseas markets, three officials said on Wednesday.
According to the officials, a thorough assessment of customs charges in the context of numerous free trade agreements (FTAs) is anticipated after May.
On 31st January, the Government reduced the customs charges on a range of components from 15 per cent to 10 per cent in an effort to make finished goods more affordable and to facilitate compliance.
Several stakeholders brought up the subject of duty inversion in light of the free trade agreements that were signed back in 2010. A second official stated that a legislative commission had also brought attention to the matter earlier this month.
“The committee is of the view that failure to address this issue could lead to severe negative consequences for the manufacturing industry,” he said.
The panel noted that because of duty inversion in numerous products—where imports of raw materials were subject to higher taxes than completed goods—exporters faced unfair competition in several markets.
According to a third official, international brands like Hush Puppies, Geox, Clarks, H&M, Ecco, and others are eager to move their production operations from China to India, but they insist that producers use certain parts that are only available overseas. The Indian textile industry is in a similar predicament, he continued.
