Budget 2023: Some items may get costlier as govt plans customs duty hike

Budget 2023: The Centre may hike customs duty on dozens of items in its budget to be presented on February 1, pushing the prices up. The central government has prepared a list of over 35 items that are being examined for a possible hike in customs duty, Economic Times reported on Monday.  

Among the items for which duty hike is being considered are private jets, helicopters, high-end electronic items, plastic goods, jewellery, high-gloss paper, and vitamins, the report said. With the move, the government aims to reduce imports and boost local manufacturing of these products.

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Last month, The Indian Express reported that the government was planning to regulate imports of 'non-essential items' by hiking import duties. A senior official told the daily that the government was looking at non-essential imports for which there was enough manufacturing capacity in the country.

In November, India's trade deficit widened to $23.89 billion while exports recorded a flat growth of 0.59 per cent to $31.99 billion during the same month.

During April-November 2022, India's exports increased by 11 per cent to $295.26 billion. However, its imports grew by 29.5 per cent to $493.61 billion during the eight months period of this fiscal.

India has been taking measures like production-linked incentive schemes to encourage manufacturing in the country to bring down its imports and improve export numbers. However, India's widening trade deficit with China is now worrying a section of policymakers.  

In December, Commerce and Industry Minister Piyush Goyal said that the trade deficit between India and China had touched $51.5 billion during April-October this fiscal. The deficit during 2021-22 had jumped to $73.31 billion as compared to 44.03 billion in 2020-21.

In the Budget 2022, the Finance Ministry raised customs duty on several products - most of them were being imported from China. For instance, customs duty was hiked on headphones, speakers, smart meters, and umbrellas. These products are mostly imported from China.