Basic customs duty is the extra tax levied over normal taxes on items announced by the government. The government has also introduced several electronics schemes recently
The government is looking at the feasibility of introducing end dates for the higher import tariff on certain electronic items including mobile phones, TV sets and electronics components. A report in Livemint also points out towards end dates for ending tariffs as a signal to the world that India is an open economy.
Citing an anonymous government official, the report mentions that no decision has been taken so far but the thinking is taking place towards taking a decision. It is to be noted here that basic customs duty (BCD) on mobile phones was increased from 15 to 20 per cent in 2017. Similarly, five per cent BCD was imposed on importing open cells for TV sets recently.
Local producers, in many cases, also get the benefit of importing certain capital goods without paying import duty. This is in addition to the protection provided to local producers in form of various BCDs.
1996 Information Technology Agreement (ITA)
India, a part of the 1996 Information Technology Agreement, cannot levy tariffs on certain products, including mobile handsets. As a matter of fact many countries including the likes of US, have complained about the imposition of tariffs on certain products to World Trade Organization (WTO).
On the other hand, India, during 2019-20, imported electronic components worth Rs 1,15,558 crore, out of which. Out of these imports from China were Rs 42,983 crore. India, during the same time, imported smartphone components worth Rs 56,039 crore during 2019-20. Out of the total amount, smartphone components worth Rs 25,441 crore were imported from China.
The Department for Promotion of Industry and Internal Trade (DPIIT) has also asked various ministries to formulate plans for boosting domestic manufacturing of goods in the 24 key areas identified by it. The government of India is aiming to make India a self-reliant country in these segments. Boosting exports and becoming a global supplier, include the focus areas. Electronics was recognized as one of the 24 key sectors.