Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

India raises import taxes in move set to spook some foreign firms

Stock MarketsFeb 01, 2020 08:11AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Aditya Kalra and Chandini Monnappa

NEW DELHI/BENGALURU (Reuters) - India on Saturday raised taxes on imports of goods such as electronic items, toys and furniture, aiming to give impetus to domestic manufacturing in a move that will hit Sweden's IKEA and other foreign firms.

The measures, announced by Finance Minister Nirmala Sitharaman in her 2020-21 budget, come amid criticism from some companies that India has increasingly resorted to protectionist rules that discriminate against foreign companies.

Listing the new taxes, the government said they were in line with Prime Minister Narendra Modi's "Make in India" program aimed at promoting domestic industry.

Taxes on imports of items including kitchenware, fans and small electrical appliances will be doubled to 20%, while the levy on furniture including seats, lamps and mattresses will be raised to 25% from 20%.

IKEA's India CEO Peter Betzel said the company was disappointed with the increase. "We are further evaluating the impact of the hike on our total business," he said. IKEA, which has committed more than 1.5 billion euros ($1.7 billion) in India investments, imports roughly 75% of goods sold in the country.

Sitharaman defended the decision, saying the rationale was that if certain goods were being manufactured locally at "equal quality, if not better, (then) we had no reason to import."

Taxes on imported toys would be tripled to 60%, a move one industry executive said could hit imports of toys made by firms such as Lego, Hasbro (O:HAS) and Mattel (O:MAT), and boost smuggling of unbranded toys from abroad.

"It's a protectionist move," said the executive.

The new tariffs also come as India and the United States try to resolve trade differences and have been at odds over certain tariffs. Washington has been urging India to not impose trade barriers that restrict growth of American firms.

The government also said a tax of 5% will be imposed on imported medical device imports to fund health infrastructure. The measure could hit firms such as Abbott (N:ABT) which are already battling price caps imposed by the government.

"It would make some imported medical devices costlier and that increase will likely be passed on to consumers," said an India-based executive of foreign medical device company.

The duty on shelled walnuts will be raised to 100% from 30% while certain car and smartphone parts will also face higher import taxes.

India raises import taxes in move set to spook some foreign firms
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Tim Morse
Tim Morse Feb 01, 2020 8:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
it will come back to *****really hard this decision
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email