Thursday, November 21, 2013: According to a survey, India’s inverted duty structure is harming the locally produced goods, making them uncompetitive in comparison to the products that are imported to India.
ET report states, India’s inverted duty structure means that finished goods are taxed at lower rates than raw material. This arrangement has an adverse affect on manufacturers because they have to pay a high duty on raw materials, while completed manufactured goods from abroad pay a lower duty.
The survey, which was carried out by the Federation of Indian Chambers of Commerce and Industry (FICCI), stated that this situation has been reported by nine manufacturing sectors, including aluminium products, capital goods, cement, chemicals, electronics, paper, steel, textiles and tyres.
This effect has been worsened by several regional and bilateral Free Trade Agreements (FTAs) that our country has made with Japan, ASEAN, South Korea and others.
The inverted duty structure, coupled with concessions given to trading partners under FTAs means that some locally products can’t compete with imports, reported ManMonthly.com.
For necessary action, the FCCI survey was submitted to India’s sectoral Ministries, Tariff Commission, National Manufacturing Competitiveness Council (NMCC), Department of Industrial Policy and Promotion (DIPP) along with the Planning Commission.
