InvestorQ : Why has the Budget 2021-22 imposed higher import duties on a number of key product categories?
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Why has the Budget 2021-22 imposed higher import duties on a number of key product categories?

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Rashi Mehra answered.
2 months ago
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In fact, even before the Union Budget was announced, the big expectation was on the customs duty front. It was clear that the government would try to hit two birds with one stone. On the one hand, the government needed to enhance revenues. On the other hand, the government also needed to give a first-hand boost to the Atma Nirbhar program.

It is therefore little surprise that the finance minister has used the budget as an opportunity to hike import duties. In fact, the budget has increased the import duties on a complete array of products across sectors like agriculture, chemicals, plastics, automobiles, gems and jewellery etc. the idea is to encourage Atma Nirbhar Bharat by making imports expensive so that the domestic producers will become competitive and gain market share.

Of course, this has two downside risks. Firstly, it pushes up inflation as Indian consumers will end up paying more. Secondly, where the outsourcing project is also dependent on imports from other countries, it adds to the cost and impacts the economics. It is also not clear, as to what extent, this move will endear India to the WTO.

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