The central government has raised customs duty on a whopping 400 items in last two years, according to Indian Express report. The items like mobile phones, almonds, cell phone parts, apple, solar panels etc. However, the centre’s move has marked clear cut departure from the policy of lowering import duty that has been followed by previous governments. Prior to this, customs duty on non-agriculture products had decreased from 150 per cent in 1991-92 to 40 per cent in 1997-98 and subsequently, to 20 per cent in 2004-05 and 10 per cent in 2007-08, the report says.
While allegations were raised that tariff hike is “protectionist” in nature, the Union Ministry of Commerce has rejected all charges. The government had reportedly imposed customs duty on 29 US products on June 20 this year but later postponed. Experts say this would have a bearing on the WTO-mandated “bound rates”. Bound rates are the customs duty rates committed by a country to all other members under the most favoured nation principle. Breaching these rates could effectively put a country at risk of being branded as “protectionist” as per the WTO norms, which prohibit discrimination by use of tariffs by its 164 members.
However, industry players and within sections of the government itself have criticised a few tariff hikes in the last two years. The implementation of the duty hike on solar panels from September 2017 was opposed by both the New and Renewable Energy Ministry. Various trade and industry associations engaged in cashew nuts had sought withdrawal of the imposition of the duty of 5 per cent.
However, an official in the Ministry of Commerce and Industry said that hectic parleys have been started between India and the US on the issue of tariffs and that India would “stay compliant with all its commitments under the WTO”.’ India has also reduced import duties on some items. These include a cut in the import duties on palm oil with effect from September 23, 2016, from 12.5 per cent to 7.5 per cent for crude palm oil of edible grade, and from 20 per cent to 15 per cent for refined palm oil of edible grade. Import duty on wheat was reduced from 10 per cent to Nil with effect from December 8, 2016, but this was subsequently increased to 10 per cent in a little over three months, the report says.
Source : Fianacial Express