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Union Budget 2023: ‘Govt may hike customs duty on 35 items’


NEW DELHI: In order to give a boost to “Aatmnirbhar Bharat” efforts, the Modi government is considering increasing customs duties on about 35 items in the Union Budget 2023. Some of the items on which custom duty may be raised are: private jets, helicopters, high-end electronics, plastic goods, jewelry, high-gloss paper, and vitamins, said a report in the Economic Times.
The government’s move is intended to curb imports and encourage local manufacturing of some of these products. The commerce and industry ministry had previously asked various ministries to provide a list of non-essential items whose imports should be discouraged through a tariff hike.
As per the ET report, India’s current account deficit reached a nine-year high of 4.4% of GDP in the quarter ending September, up from 2.2% of GDP in the previous quarter. Policymakers are also aiming to discourage the import of non-essential goods as part of a long-term strategy to encourage domestic production.
Import tariffs on a range of items have already been raised in recent years to support the government’s “Make in India” and “Aatmnirbhar Bharat” initiatives. Quality control orders have also been issued to curb cheap imports of non-essential goods.
According to experts, if the increase in import duties is only applied to certain finished products, it will not only increase revenue, but also encourage the Make in India initiative. “The choice of these finished products should depend on their place in the global supply chain and how critical they are to the overall Indian economy,” Bipin Sapra, a partner at EY India, told the Economic Times.
Finance minister Nirmala Sitharaman is set to present the Union Budget on February 1, 2023. This would be the last full budget of the Modi government before the Lok Sabha elections in 2024.
The Union Budget is being prepared amid continuing rate hike by many central banks and in the backdrop of high inflation across the world. The US is staring at a possible recession and there is continued uncertainty over the trajectory of the Russia-Ukraine war.


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