India's most-awaited budget is just a week away. Finance minister Nirmala Sitharaman will unveil the Budget 2021-22 on February 1. Meanwhile, sources have told PTI that the government may tweak customs duties on several goods to promote domestic manufacturing and exports.
These goods could include furniture raw materials, copper scrap, certain chemicals, telecom equipment and rubber products. Sources said that while import duties could be hiked on over 20 products such as cut and polished diamonds, rubber goods, leather garments, telecom equipment and carpet, the customs duties could be removed on select raw materials (like wood in rough, swan wood and hard board) used for furniture manufacturing and copper concentrate.
"Expensive raw materials impact India's price competitiveness in the international market. The country's exports of furniture is very low (about one per cent), while countries like China and Vietnam are major players in the sector," sources said.
Last year, the government increased import taxes on several products such as furniture, toys, and footwear.
Customs duties may be reduced on these items
The government may also consider reducing customs duties on coal tar pitch, and copper scrap, while raising the levies on certain finished goods like refrigerator, washing machine and clothes dryer, one of the sources said.
The government is already taking steps to boost domestic manufacturing such as introduction of production-linked incentives scheme (PLI) for several sectors including air conditioners and LED lights.
"Tweaking of duties on these goods would help promote self-reliant India campaign and boost domestic manufacturing," sources added. (With PTI inputs)
Shashank Agarwal, MD at Salasar Techno Engineering, said that with the buzz of the 5G roll out, the telecommunication sector is anticipating a lot of opportunities in the upcoming budget.
"The Ministry of Communications has also demanded that funding be increased, specifically “Compensation to Service Providers for creation and augmentation of telecom infrastructure” spending be increased from Rs 3000 Crores to Rs 8000 Crores. In 2020-21, the department of telecommunications was allocated Rs 66,432 crores, 39% of which was towards capital expenditure, this number is expected to rise in the coming budget," he said.