The Government has decided to rejig the custom duty on several products to promote domestic manufacturing.

In a bid to protect labour intensive MSME sector, the government has decided to increase customs duty on several items. On footwear sector, customs duty has been hiked from 25 per cent to 35 per cent and on parts utilised to make footwear customs duty has been hiked from 15 per cent to 20 per cent.

On imported furniture customs duty has been hiked from 20 per cent to 25 per cent. The Finance Minister Nirmala Sitharaman said that special attention has been given to put “measured” restraints on import of items which are being produced by domestic MSMEs with better quality compared with the cheap and low quality imports.

To encourage domestic medical equipment industry, the government is also imposing a health cess of 5 per cent as a custom duty on the imports of medical equipment. The government said these goods are now being significantly made in India. The Finance Minister said that proceeds from the cess will be used in developing infrastructure for health services.

In the larger public interest, the government has also proposed to abolish anti-dumping duty on PTA (Purified Terephthalic Acid), considering its a critical input for textile fibres and help make the textile sector more competitive from global perspective.

In a move that will bring relief to newspapers , the government has also decided to reduce basic customs duty on imports of news print and light-weight coated paper from 10 per cent to 5 per cent.

It is also set to raise excise duty, by way of National Calamity Contingent Duty on Cigarettes and other tobacco products.

In the coming months, the government will also review  “Rules of Origin requirements, particularly for certain sensitive items so as to ensure that Free Trade Agreements (FTAs) are aligned to the conscious direction of our policy,” the Finance Minister stated in her budget speech.

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