Govt raises import duties up to 20% on telecom equipment, components

The government on Thursday raised tariffs on certain telecom equipment and components by up to 20 per cent, in its efforts to rein in the widening current account deficit (CAD).

Set to go live from Friday onwards, the latest set of imports includes equipment used for industrial use as well as a few components for mobile devices. These had a total import bill of nearly $5 billion in 2017-18 (FY18). 

India imported $21 billion worth of electronics in FY18, led mostly by mobile phones and their components, making up the third-biggest chunk of the import bill after crude oil and gold. 

The latest move brings the restrictive measures imposed by New Delhi to a total of six times in the current year. The latest items are part of a larger set of 34 industrial and consumer imports that were suggested by the Department of Industrial Policy and Promotion last month to the revenue department, said senior sources. 

Also, on 19 particular items, the government had last month raised import duties, including consumer electronics, diamonds, jewellery, aviation jet fuel, and leather footwear, after announcing it would reduce the import of ‘non-essential’ items. The highest number of goods targeted was home appliances with higher duties on speakers, air conditioners, household refrigerators, and washing machines.

The total import bill of the items stood at Rs 860 billion in FY18, according to the finance ministry. This, however, constituted just 2.8 per cent of India’s total import bill last financial year, raising a question mark over the efficacy of the measure.

The trade deficit, which is the biggest part of the CAD, reduced to $17.4 billion in August, lower than the $18.2 billion seen in July. In the two months of July and August, the trade deficit had risen to $35.6 billion after it stood at almost $45 billion in the first quarter of the current financial year.

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