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. |