NEW DELHI: Indian industry wants to impose heavy taxes on the imports of the country especially on the Chinese imports that became danger for local manufactures, this policy help to boost local industry, the suggestions were made during Make in India workshop held by the government here the other day.
Companies asked the government to increase duties within bound rates at the World Trade Organization to protect domestic manufacturers from Chinese low cost competition, particularly in sectors such as power equipment, capital goods and heavy industry, an official aware of the deliberations told Customs Today.
India’s trade deficit with China stands at $36 billion with exports at $15 billion against $51 billion of imports. Machinery and equipment accounted for a quarter of imports from China last year at more than $5 billion.
Bound tariff is upper ceiling on import duty allowed by WTO. While India’s average bound tariff rate is 48.6%, average basic customs duty is around 14%. This gives ample space to raise tariffs in sectors where basic customs duty is lower than bound duty.
Indian companies including Larsen & Toubro also asked the government to expand scope of domestic content requirement norms to encourage local manufacturing but this has been a major point of contention between India and the US. US Trade Representative Michael Froman last month took up the issue of local content requirement with the Indian government, alleging it hit competitiveness and pushed up costs of producers and consumers.
The US had moved the WTO earlier this year over the local content requirement in the first and the second phase of the National Solar Mission, alleging discrimination against US producers of solar cells and modules.
“While MNCs (multinationals) like GE were strongly against local content requirement norms, L&T wanted the expansion of the norm (to) help Indian industry,” said an official who was part of the closeddoor meeting.
Import substitution targets for the power equipment sector were among points discussed.
These included oil and gas, capital goods and micro, small and medium enterprises (MSME) to chart a roadmap for the short and medium term to promote domestic manufacturing and enhance ease of doing business.
