• UGI USER
  • Feb 28, 2024
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GOVT DEPTS RED-FLAG HIGH DUTIES TO CURB CHINA IMPORTS, SEEK NUANCE IN STRATEGY

Why in the news?

  • The Indian government’s inclination to progressively raise customs duties, particularly targeting imports from China.
  • This move has raised concerns within various government departments, as some advocate for a more nuanced approach, emphasizing the potential negative impacts on India’s manufacturing initiatives, such as the Production-Linked Incentive (PLI) scheme.

Highlighting the High Duties’ Impact on Competitiveness:

  • China constitutes 14% of India’s imports, providing crucial components for sectors ranging from electronics to pharmaceuticals.
  • Average tariffs in India surged from 13% in 2014 to 18.1% in 2022, making India less competitive compared to nations like Vietnam, Thailand, and Mexico.
About the Production-Linked Incentive (PLI) scheme:

●   Boosts domestic manufacturing, import substitution, and employment.

●   Launched in March 2020, initially for mobile, electrical, and medical sectors.

●   Expanded to 14 sectors, offering financial rewards for manufacturing in India.