The Department of Industrial Policy & Promotion (DIPP) is analysing the extent to which India’s free trade agreements with Japan, South Korea and the Asean have distorted the import duty structure and how it could be corrected.
India Inc has asked the Government to address the inverted duty structure — under which import duties on finished products are higher than duties on inputs — in the forthcoming Budget.
An inverted duty structure encourages import of finished products and discourages value-added manufacturing, industry argues.
“While this year’s Budget could make some changes in the import duty structure to correct some inversion, it has to be an on-going exercise because the issue is complex,” an official from the DIPP said.
The DIPP has asked the Commerce Department for inputs which, officials say, could take some time.
Source : http://www.thehindubusinessline.com/todays-paper/tp-news/commerce-ministry-assessing-impact-of-free-trade-pacts-on-local-manufacturing/article6099086.ece