Govt mulls customs duty hike, trade barriers on 'non-essential' imports amid stand-off with China

The Centre is planning to hike import duties and impose stricter trade barriers on certain products from China and other countries. Although the plan stems has been under review for the past few months, imports from China will be in its focus amid the ongoing border tensions with the country.

The plan has been under review since at least April and is in line with Prime Minister Narendra Modi's Atma Nirbhar Bharat plan, a Reuters report said. The new duty structures are likely to be gradually outlined over the next three months, the report further said.

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The government is considering raising import duties on 160-200 products and imposing non-tariff barriers - such as licensing requirements or stricter quality checks - on another 100, according to the report.

The focus will be on reducing imports of lower quality non-essential items that render Indian goods in the same category uncompetitive. This will cover imports to the tune of $8-10 billion, the report said. This is likely to encompass a list of 300 items.

"We are not targeting any country, but this is one of the ways to reduce a trade deficit that is lopsided with countries like China," a government official told the news agency.

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About 14 per cent of India's total imports are from China. Between April 2019-February 2020, India has imported goods worth $62.4 billion, while exports to the neighbouring country stood at $15.5 billion. India has time and again raised concerns over widening trade deficit with China, which stood at about $47 billion during April-February 2019-20.

The main goods imported from China include clocks and watches, musical instruments, toys, sports goods, furniture, mattresses, plastics, electrical machinery, electronic equipments, chemicals, iron and steel items, fertiliser, mineral fuel and metals.

India has increased duties on more than 3,600 tariff lines covering products from sectors such as textiles and electronics since 2014, Reuters said while quoting a government document. India already raised taxes on imports of goods such as electronic items, toys and furniture in February, drawing criticism that it was a protectionist move against foreign businesses. Sweden's IKEA, for example, said at the time it was disappointed with the higher tariffs.

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(With agency inputs)