Home > News > Content
India Suddenly Raised Tariffs Again, Involving A Large Number Of Plastic Products
- Jan 02, 2019 -

The Indian Ministry of Finance has notified that import tariffs on 17 commodities will be increased from the 12th of this month. These 17 items include smart watches, telecommunications equipment and more. The notice shows that tariffs on smart watches and telecommunications equipment have increased from the current 10% to 20%.


Earlier, the Indian Ministry of Finance had raised tariffs on 19 imported goods. The Indian Ministry of Finance has decided to increase import tariffs on 19 kinds of goods such as washing machines, air conditioners, diamonds and aviation fuels since September 27. Among them, the import duty rate of air conditioners, refrigerators and washing machines increased by 20% from 10%; the aviation fuel import tax rate increased from zero to 5%. The Indian Ministry of Finance said that in the 2017-18 financial year, the 19 imports of India totaled 860 billion rupees.


 


The two reasons for raising tariffs on imported goods are the same: reducing the current account deficit and preventing further devaluation of the rupee.


The same as the previous one: the goods that have been raised twice in successive tariffs are almost all of China's major exports to India! !


The most superficial reason for India’s tariff increase is the constant depreciation of the rupee against the US dollar. Since the beginning of the year, the rupee has depreciated by more than 15% against the US dollar. This is attributed to the growing domestic current account deficit and trade deficit in India. Raising tariffs and restricting imports are considered to be more effective means of improving the current Indian trade deficit.


However, from a more intrinsic point of view, the Indian government's tax increase has forced importers to transfer production capacity to India to promote “Made in India”.


 


In July, the Indian Ministry of Finance imposed a two-year safeguards tax on imported battery chips and components. The tax rate is 25% in the first year, 20% in the first half of the following year, and 15% in the second half of the following year. Manish Sharma, CEO of Japan's Matsushita India and president of white goods, said that the increase in tariffs on September 27 will boost India's manufacturing tariffs and promote the development of local manufactured goods. Develop new capacity in India.


India announces import tariffs on 19 "non-essential commodities"


On September 26, the Indian government announced an increase in import tariffs on 19 "non-essential commodities", which came into effect on September 27. To reduce the growing current account deficit, to mitigate the impact of capital outflows on the depreciation of the rupee.


Among them, the aviation fuel tariff rate increased from zero to 5%, which caused a certain blow to airlines; the tax rate for diamonds and other gems used in jewelry manufacturing was raised from 5% to 7.5%; the import duty rate for imported air conditioners, refrigerators and small washing machines was 10%. Double to 20% and the price will be more expensive. Tires, speakers, shoes, suitcases, travel bags, and a large number of plastic-made cutlery and kitchen items will face higher tariffs.