India raises tax on some imports to spur manufacturing

India increased duties on a wide set of imported goods ranging from headphones to solar panels to bolster local manufacturing and generate jobs, Finance Minister Nirmala Sitharaman said Tuesday.

The government raised tariffs on imports heaphones, loudspeakers, smart meters used by power distribution companies and solar panels as part of the budget proposals introduced in parliament on Tuesday.

Prime Minister Narendra Modi’s administration is spearheading a plan to boost domestic manufacturing and create jobs after the economic impact of the pandemic lead to a spurt in unemployment in the past two years. It has taken measures to turn India into a factory for the world, taking advantage of supply lines shifting out of China.

Some of the increase will be effective Feb. 2, according to the budget documents. The rest will be implemented from the new financial year starting April 1.

More than 350 customs exemptions are proposed to be gradually phased out including on certain agricultural products, chemicals, fabrics, medical devices and drugs and medicines for which sufficient domestic capacity exists.

Some of the items on which duty has been raised are as follows:

• Headphones and earphones to 20% from 15%
• Single or multiple loudspeakers to 20% from 15%
• Smart meters to 25% from 15%
• Solar cells to 25% from 20%
• Solar modules to 40% from 20%
• Sodium cyanide to 10% from 7.5%
• Microbial fats and oils and their fractions to 100% from 30%