Union Budget 2019: Nirmala Sithraman in her first budget is likely to announce higher customs duties on several products to provide relief to sectors including auto, agri, steel and FMCG. The auto sector is expecting the government to increase customs duty on fully imported commercial vehicles to 40 per cent from 25 per cent and semi-knocked down CVs to 25 per cent from the current rate of 20 per cent. The Centre may also announce a phased increase in basic customs duty on parts of electric passenger vehicles to promote domestic manufacturing of EVs.
Though the Centre increased import duty on wheat to 40 per cent from earlier 30 per cent in April, farmers' bodies have approached the government to hike it further to support the domestic economy. Wheat prices have fallen significantly in 2019 due to ample supply from the last year's crop and expectations of record output this year. The Centre could hike customs duty to discourage flour mills from buying foreign wheat. Nirmala Sitharaman could also announce relief to the horticulture industry by increasing import duty on apple imports to benefit the apple growers in hilly states.
The Indian Steel Association has also approached the Centre to discourage imports of non-essential steel items, saying duty on items such as 'hot rolled items and colour coated steel' should be hiked as the industry can meet the entire domestic requirement. "Ensuing trade discord between USA and China, protectionist measures by EU, Canada, Turkey, among others, and global steel excess capacity is impacting the steel market," the body said.
Besides, sectors like jewellery making may be helped with lowering of import duty on gold, as prices of the yellow metal are shooting up in the international market. In a big boost to the domestic perishable industry, India in June announced a hike in customs duties on as many as 28 US products, including apple, almond, pulses and walnut, in response to higher tariffs imposed by Washington on Indian products like steel and aluminium. There are expectations that the government may likely introduce similar initiatives to please domestic businesses. America in March last year had imposed 25 per cent tariff on steel and a 10 per cent import duty on aluminium products. Earlier, there was no duty on these goods.Also read:Nirmala Sitharaman to present her maiden budget today; arrives at Ministry of Finance