Bhubaneswar: With a view to protect the domestic industry from cheap imports, the Finance Ministry in its Budget proposals has proposed several measures including raising of Customs duty, imposing suitable safeguard duties and reviewing of Rules of Origin requirement. This step by the government will benefit the domestic industry especially the metal industry.
The Finance Minister Nirmala Sitharaman, in her budget speech, has proposed to incorporate suitable provisions in the Customs Act and added that in the coming months, there will be a review of Rules of Origin requirements, particularly for certain sensitive items so as to ensure that Free Trade Agreements (FTAs) are aligned to the conscious direction of our policy. The Minister added that it has been observed that imports under FTAs are on the rise, undue claims of FTA benefits have posed threat to the domestic industry. “Such imports require stringent checks”, Smt Sitharaman said.
The Minister said that we are also strengthening provisions relating to safeguard duties which are applied when surge in imports causes serious injury to the domestic industry. The amended provisions shall enable regulating such surge in imports in a systematic way, she said.
Basics Customs Duty on Table kitchen and other household appliances of Iron & Steel, Copper & Aluminium has been increased in the Budget. Basics Customs Duty on Padlocks and locks of base metal has also been increased. Also, basics Customs Duty on tin, lead and zinc products have been raised.
“Imposition of higher Basics Customs Duty on household finished products manufactured from steel, copper and Aluminium, is likely to curb cheaper imports of these finished products. This is likely to insulate the domestic manufacturers of these products, which in turn is likely to support the demand for base metals” analyses Care Ratings.
Meanwhile, the reduction of customs duty on Calcined Petroleum Coke by 2.5% will lower the cost of production of the key raw material thereby benefitting the Aluminium industry.
“Calcined coke is one of the important raw material used for manufacturing Aluminium. Domestic availability of this product is low, hence lowering of the duty is likely to reduce the cost of production, thereby positively impacting primary Aluminium producers” said Care ratings.