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Budget 2021: Customs duty hike to make electronics items more expensive In the Budget for 2021-22, finance minister Nirmala Sitharaman introduced higher import duty rates on over a dozen handset and automobile components.
To give a push to its Atmanirbhar Bharat policy, the Centre on Monday unveiled a revised Customs duty structure that will effectively increase duties on a wide range of items. The upward revision in rates, effective from Tuesday itself, are intended to curb import of auto components and agri produce. In sectors like electronics, they may lead to further price hikes in the coming months. In the Budget 2021 , finance minister Nirmala Sitharaman introduced higher import duty rates on over a dozen handset and automobile components.
Key electronic components like printed circuit board assembly, camera module and connectors will now attract 2.5 per cent duty. In the automobile sector, Customs duty rates for dozens of items, like safety glasses, parts of the signalling equipment, brakes and ignition wire sets have been raised to 15 per cent from 10 per cent. Further, import of a vast number of items in the agri sector, fabrics, gems and jewellery, plastics, chemicals and leather have been made unattractive by hikings duties on them. According to industry stakeholders and experts, some revisions are aimed at boosting the government’s localisation of production plan. Others have been introduced to protect local producers and manufacturers against cheaper imports from countries like China.In the electronics sector, for example, steeper import duty rates are a precursor to upcoming schemes under the productionlinked incentive (PLI) plan. The finance minister has already hinted at bringing 13 sectors under the PLI. “These hikes are part of the broader plan to push local production of electronics and auto components. In the short term though, these may lead to price rise,� said Bipin Sapra, tax partner at EY India.