Sunset date for increases in import tariffs | Economic Times

New Delhi: India is likely to introduce a sunset date for higher import tariffs imposed on goods such as mobile phones and televisions to boost local manufacturing. Policymakers are of the view that an end date to tariff measures announced to give a boost to the Make in India programme is necessary. This will push local manufacturing to become globally competitive within the given concession period, a top government official aware of deliberations told ET.Policymakers don’t want tariff protections to lead to high-cost local manufacturing, as was the case before liberalisation.“Increase in import tariffs to provide some protection to local industry will now come with a sunset date,” the official said. “The idea is to ensure that the local industry makes sincere attempts to become competitive instead of just relying on protection from higher import tariffs.”Inter-ministerial discussions have been held on the issue and a plan may be put in place, not just for any future increases in tariffs, but also on the ones already announced to offer incentives to local manufacturing.The government had raised import tariffs on a host of products as part of the phased manufacturing plan (PMP) in the electronics sector.Value AdditionThe programme may be expanded to include some other sectors under the Atmanirbhar Bharat initiative.The focus is now to ensure there is increased value addition in the country under the PMP and production-linked incentive (PLI) scheme.Higher import tariffs in the mobile segment have been among the key components of the phased manufacturing plan.India has also resorted to import restrictions in a number of sectors, including tyres, specific television models and, most recently, air conditioners.“There cannot be endless protection running for multiple years,” the official said. “Domestic players in the intervening period need to ensure that their products attain world-class standards.”The focus will also be on improving logistics and reducing power costs for the local industry to help it become globally competitive.Former Niti Aayog vice chairman Arvind Panagariya among others have criticised the imposition of tariffs. The government has defended the imposition of higher tariffs saying that these are not across the board but in sectors where Indian industry had made rapid advances but is no longer competitive.“We may not have the technology for some hi-tech ones, but that which we can produce we don’t want to import from outside. So, if there is an import restriction, it is for those items,” finance minister Nirmala Sitharaman had told ET in an interview last month. “But we are also saying please refrain from the temptation to import which you have the capacity to produce.”78740330India had in July imposed restrictions on the import of some types of colour televisions, imports of which added up to $800 million in FY20. Last week, curbs were imposed on the import of air conditioners. Electrical and electronics imports were worth nearly $50 billion in FY20.