To boost desi companies, curbs likely on tyre, furniture imports

NEW DELHI: The government is set to clamp down on import of furniture and certain types of tyres, especially retreaded ones, amid concerns that cheap goods are flooding the market and pushing out domestic manufacturers.

An official decision is expected over the next few days with a detailed analysis on furniture imports having already been undertaken by the commerce department, sources told TOI.

Separately, certain types of gems are also on the radar for import curbs.

In recent months, the government has stepped up efforts to reduce “non-essential” imports as part of a strategy to boost the ‘Make in India’ initiative, which has been hit by companies holding up investments due to the economic slowdown.

As reported in TOI on December 3, the government has identified over 350 “non-essential” imports, ranging from toys and electronics to footwear and textiles goods, on which quality standards, higher duties as well as licensing (as opposed to free imports) are being worked out.

Sources said furniture imports have emerged as an area of concern in recent years and are also plagued by a massive problem of under-invoicing, where the value of the goods being shipped into the country is shown to be lower than the actual import price, denying customs duty to the exchequer. “Many of these payments are being made through illegal channels, which is another issue that needs to be addressed,” a government officer said.

In 2018-19, furniture imports (including bedding and mattress) were estimated at $1.8 billion (around Rs 12,500 crore), with government officers and industry players suggesting that office furniture was largely ‘Made in China’ and suffered from poor quality. Of this, close to $1 billion came from China, commerce department data showed.

Between April and November 2019, the trend has continued with imports estimated at around $1.1 billion, of which Chinese shipments were about $637 million.

While tyre imports fell over 10% in the last financial year, the problem is largely due to shipments from Thailand and China, both for new and retreaded tyres. Of the $430 million of new tyre imports in 2018-19, around $127 million was from Thailand, with around $92 million coming from China. Similarly, of the $15.5 million worth of retreaded tyres imported into the country, almost half came from Thailand.

“This concern has been there for the last few years and there has been a discussion around restricting retreaded tyres, which is also a demand from the industry,” the government officer said.

A section within the government is, however, of the view that import restrictions may not be the best way to boost domestic manufacturing and the Centre should focus on sectors where India is competitive or segments such as electric vehicles or electronics where global demand is expected to rise significantly in the coming years.

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