The CII report suggests that while final products should be kept in the standard slab for import duty, raw materials should ideally have the lowest or no import duty at all to improve India's export competitiveness.
The government should reduce import duty on certain products and manufacturing inputs that are not being manufactured in India but that are used in final and intermediate products, to improve India’s export competitiveness, said industry body Confederation of Indian Industry (CII) in its Pre-Budget Memorandum 2022-23.
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“In the global transformed scenario, for union Budget 2022-23, CII proposes a set of general principles to guide the tariff structure along with a roadmap to encourage and calibrate domestic manufacturing in alignment with global trade trends that would strengthen its manufacturing capacities and boost its export competitiveness as per shifting global value chains in the next 3 to 5 years,” the report stated.
The CII body stated in its report that duty slabs should be changed to more competitive levels over the next three years to boost domestic manufacturing. The changes in import duty should also be accompanied by policy actions like production-linked incentives and phased manufacturing programmes.
“Duty on imports of final products
Additionally, the report suggests that, after consultation with stakeholders and review of final and intermediate products that are being manufactured in India, the import duty for inputs needed for the production of such goods should be reduced. This will ensure that the overall cost of the final and intermediate products are lower thanks to lower input costs, and can compete in the global export environment.
“RoDTEP rates should be reviewed and enhanced commensurate with the actual embedded taxes and duties. All the export products should be covered under the RoDTEP scheme. Export incentive may be transferred directly to the bank account of the exporters like duty DBK, instead of routing through issuance and transfer of credit Scripts,” the CII report added.
(Edited by : Shoma Bhattacharjee)