New Delhi: The Consumer Electronics and Appliances Manufacturers Association (CEAMA) Friday urged the government to raise customs duties on imported finished goods while lowering the same on components in order to promote domestic manufacturing.
Ahead of the interim budget, CEAMA has suggested to increase the basic customs duty (BCD) on import of finished goods such as TV, AC, refrigerators and washing machines.
CEAMA also called for a reduction in BCD on critical components such as compressors, open cell and display panel used by the industry to 5 percent from the existing 10 percent, to boost domestic manufacturing.
"This would help local manufacturers produce goods at competitive prices and promote exports as well with tax benefits on exports of ACE goods," said CEAMA president Kamal Nandi.
According to the industry body, contrary to the 'net zero import in electronics' objective of the government, finished goods are often imported at a lower duty than parts in the country, on account of various free-trade agreements.
It has also asked for subsidies on locally manufactured products, which "will act as a stimulus" for the development of the components manufacturing base and boost 'make-in-India' initiatives.
Besides, CEAMA has requested the government to look on the issues on import of other intermediaries and segments such as security and surveillance cameras and related products, which are largely imported.
"We propose a hike in the BCD for CCTV camera and CCTV recorders from 15 percent to 20 percent, to promote local manufacturing and discourage imports, further supporting its indigenous production," said Nandi, who is also Godrej Appliances' business head and executive vice-president.
According to CEAMA, the industry, which is struggling for growth for the past two years, largely imports critical components such as open cells, display panels and compressors and China alone contributed 59 percent in that.
"Even though the consumer demand may have grown over the years, local manufacturing has not been able to keep pace with growing consumer demand. When it comes to components, China enjoys the advantage of scale which has led to their exports as well much to the disadvantage of Indian manufacturers," said CEAMA.
Some components are still not manufactured in India, as it is cheaper to import as factors such as "high cost of investment, infrastructure and logistics" are acting as deterrents for investors.
To keep watching India’s No. 1 English Business News Channel – CNBC-TV18, call your Cable or DTH Operator and ask for the Colors Family Pack (inclusive of 24 channels), available for Rs. 35/- per month, or subscribe to the channel for Rs. 4/- per day.
To keep watching the Leader in Global Market & Business News – CNBC-TV18 Prime HD, call your Cable or DTH Operator and ask for the Colors Family HD Pack (inclusive of 25 channels), available for Rs. 50/- per month, or subscribe to the channel for Rs. 1/- per day.
Firstpost is now on WhatsApp. For the latest analysis, commentary and news updates, sign up for our WhatsApp services. Just go to Firstpost.com/Whatsapp and hit the Subscribe button.
Updated Date: Jan 25, 2019 17:11:50 IST