The government is exploring the possibility of creating new categories in its tariff structure that will allow it to impose import duties on hi-tech products without violating a global agreement that mandates nil duties, reported Economic Times.
The government has already imposed customs duties on mobile phones to encourage manufacturing in India. The finance and commerce ministries and the department of electronics are in discussions on the issue to give a ‘Make in India’ push to hi-tech products.
Officials said to ET that some countries have already used the flexibility available in the Harmonised System of Nomenclature of goods to raise duties without running afoul of the Information Technology Agreement 1, or ITA1. Violations of the agreement are challenged at the World Trade Organization (WTO).
New Delhi had imposed customs duty on smartphones from July 1, 2017 and subsequently on some inputs as well. However, there have been protests from countries such as Japan disputing imposition of these duties. A review of the tariff structure to introduce new lines would ring-fence India from protests that can be taken to the WTO, say experts.
The proposal to introduce new tariff lines may possibly help in protecting domestic industry and possibly not being questioned from binding commitment perspective, said Rahul Shukla, executive director, PwC to ET.