Govt proposes decreases tariffs on 600 raw materials line

The government has approved sharp cuts including exemptions on raw materials under 600 tariff lines to boost import substitutions of consumer industries and to promote exports from traditional and non-traditional sectors.

The decision will be announced in the budget 2021-22. There are also several other tariff lines that will be taken for lower duty reduction. In the budget 2020-21, the government has cut tariffs on 2,000 tariff lines.

Ahead of the next budget, the National Tariff Commission has submitted to the finance ministry a report that shows that tariff rationalisation plan of the government has led to industrial growth in the country. Exemption of duty on raw materials leads to its bulk import and subsequent exports of those industries.

As a result of this at the sector level, exports of textile, articles of wood, rubber, plastic, glass, metal, chemicals, and electrical appliances are significantly affected by a change in intermediate input tariffs.