In February 1st of this year, the India finance minister Arun Jaitley submitted the 2018-2019 annual budget proposal to Parliament. In the proposal, plans to raise tariffs on auto parts, mobile phone, lithium batteries, watches, toys and other products, but also the social welfare surcharge charged in the basic tariff based on 10% (Social Welfare Surcharge), intended to promote the development of manufacturing industry, to create more jobs for the country." The new deal has been implemented since April 1st.
1. what are the main affected products?
The cell phone tax rate rose from 15% to 20%.
Part of the mobile phone accessories (batteries, chargers, adapters) increased from 10% to 15%.
The tax rate of some LCD/LED/OLED panels and TV components rose from 7.5%-10% to 15%.
Some auto parts, including spark ignition engine, compression ignition engine, crankshaft, electric ignition equipment etc. the tax rate from 7.5% to 15%;
The tax rate of artificial jewels rose from 15% to 20%.
Some cosmetic products (perfume, cosmetics and skin care products) have increased from 10% to 20%.
The rate of watch, smart watch and wearable equipment increased from 10% to 20%.
The rate of sunglasses increased from 10% to 20%.
The footwear tax rate rose from 10% to 20%.
The tax rate of some toys rose from 10% to 20%.
The tax rate of edible oil, such as peanut oil and safflower oil, rose from 12.5% to 30%, and the rate of refined edible vegetable oil rose from 20% to 35%.
What is social welfare surcharge (Social Welfare Surcharge)?
In view of the additional social benefits surcharge, it will replace the Education Cess, Secondary and Higher Education Cess.
The previous Education Cess charged 3% of the goods to the imported goods; after the proposal was passed, it was 10% of the social welfare surcharge. At the same time, gasoline, high-performance diesel, silver and gold enjoy a 3% social welfare surcharge preferential tax rate. Before the import of the educational surcharge is exempt, the social welfare surcharge will still be exempted.
3. what is the purpose of India doing this?
The financial plan requires a substantial increase of import tariffs, is actually aimed at the Chinese manufacturing ", aims to further strengthen the India government proposed the" made in India "(Make in India), the" digital India "(Digital India) strategy, turning India into a big manufacturing country.
According to the statistics of India business information statistics department and the Ministry of Commerce of India, in 2016, the trade volume between India and China was 69 billion 620 million dollars, and China maintained a surplus of 51 billion 690 million dollars for India. Between April and October last year, India's trade deficit with China reached $36 billion 730 million. China has become India's largest trading partner and the largest commodity source. Most of the products exported to India in China are high value-added products, while the products exported to China in India are mostly low value-added products.
Because India is heavily dependent on China products, coupled with the huge trade deficit with China, so the India hopes to raise tariffs on imported goods, promote India manufacturing, to protect domestic enterprises; at the same time, forcing some manufacturers to set up factories in mainland India, in order to reduce the cost of tariffs.
According to statistics, in the first two months of 2018, there have been up to 8 anti-dumping investigations launched by India in China, and India has become the first country against China's anti-dumping. (compiled: LEDinside James)