The Federation of Indian Chambers of Commerce and Industry (FICCI) has said that nine manufacturing sectors have reported duty inversion and these sectors are Aluminum products, Capital Goods, Cement, Chemicals, Electronics, Paper, Steel, Textiles and Tyres.
India is now a part of a number of regional and bilateral Free Trade Agreements (FTA) like India-Japan, ASEAN, India-South Korea etc. These FTAs aim to provide equal opportunity to Indian players in terms of market access. However, the higher import duty on raw materials due to concessions given by India under the FTAs has resulted in inverted duty structure in certain segments that makes Indian manufactured goods (those dependent on imported raw materials) uncompetitive in domestic markets.
The tables below show inverted duty in case of capital goods sector under India Korea Comprehensive Economic Partnership Agreement (CEPA) and on MFN basis:
FICCI has submitted the study to respective sectoral Ministries, Tariff Commission, National Manufacturing Competitiveness Council (NMCC), Department of Industrial Policy and Promotion (DIPP) and Planning Commission for necessary action.
Courtesy: FICCI Media Division