Central Board of Indirect Taxes & Customs’ revised Customs Tariff effective from 01.01.2022 on Imports of Intermediates & Raw-materials at 10% and Finished products also at 10% will result in Death Warrant for Indian Manufacturing sector and destroy the vision of “Make in India”
The industry is surprised to note that in spite of repeated appeals and detailed explanations to Ministry of Finance and Ministry of Chemicals and Fertilizers, Customs Duty structures on imports of Readymade Products (Finished product) kept same at 10%. In comparison, Customs Duty applied on imports of Raw-material and Intermediates (products used for manufacturing) is also 10%, which does not leave much of scope for the growth of the indigenous manufacturing sector.
Above step surely will encourage Imports of Finished products rather than indigenous manufacturing in India. The country has already been witnessing surging imports of finished products.
Revised Customs Duty On Import Of Raw Materials: Impact on Import of Pesticides
As per estimates by CMIE, Ministry of Commerce, during the year 2020-21 imports of Pesticides increased to a staggering 41.2% versus domestic production increase of 11.9%, which necessitates steps to marginalize imports. But the authorities are ignorant of the increasing imports of Readymade products, which will lead to closing down of many Indian manufacturing units, particularly MSMEs.
Chinese and multi-national companies are aggressively invading Indian Market which is affecting the growth of Indian industries and manufacturing activities in India.
Pesticides Manufacturers & Formulators Association of India (PMFAI) being the largest national association representing Pesticide sector in India, has represented the matter to concerned authorities in Government of India. PMFAI has appealed the authorities to provide equal opportunities to Indian Manufacturing sector by increasing Customs Duty on all imports of Finished products to minimum 25% which falls under Chapter 3808.
If measures are not taken to stop surging imports, particularly imports of Finished products, Chinese and other multi-national companies will continue aggressively invading Indian Markets which will destroy domestic manufacturing sector.
Import of Raw Materials Vs Finished Products
There must be a reasonable variation in applying Customs Duty on inputs which are imported for Manufacturing in India vs Finished products which are imported. Otherwise, manufacturing sector in India will always remain at big disadvantage, particularly MSMEs who are key drivers of country's economy and main employment providers for Indian citizen.
In imports of Finished Products, these finished products are imported without any value addition in terms of manufacturing and employment, which helps supporting investments, infrastructure and job opportunities abroad, rather than in India.
