India is set to review import tariffs on over 30 items including luxury cars and solar cells, potentially leading to higher imports from the United States, a senior finance ministry official said.
In a bid to counter President Donald Trump’s growing tariff actions, the government has already reduced tariffs on several items including high-end bikes, cars, and chemicals in the latest budget, while imposing additional Agriculture Infrastructure Development Cess (AIDC), an alternative tariff, on many items.
CUT IN BASIC CUSTOMS DUTIES
The Indian budget on Saturday slashed basic customs duties on several items including luxury cars, solar cells and machinery. The peak import tariff has been cut from 150% to 70%, and average tariffs to below 11% from 13%, while an alternative tariff called the Agriculture Infrastructure Development Cess (AIDC), has been raised on certain items.
AGRICULTURE INFRASTRUCTURE DEVELOPMENT CESS
After reducing peak import tariffs, India has introduced a special list of 32 items, including luxury cars and chemicals, upon which the AIDC tariff of 5% to 70% has been imposed.
Earlier there was zero AIDC tariff on these items.
LUXURY CARS, MOTOR VEHICLES
Luxury cars with a CIF (cost, insurance and freight) value exceeding $40,000 attract a surcharge of 40%, along with a reduced basic custom duty of 70%.Transport vehicles and used motor vehicles face an AIDC tariff of 20% and 67.5% respectively, while basic customs duty has been lowered to 20% from 40%.Yachts and sports vessels attract a surcharge of 7.5%.
SOLAR CELLS, MODULES
Solar cells, modules, and other semiconductor devices attract a surcharge of 7.5% to 20% on top of a reduced import tariff of 20%, down from 25%-40%.
CHEMICALS
Laboratory chemicals now face a reduced basic customs duty of 70%, down from 150%, along with an agriculture cess of 70%.
BUILDING MATERIAL
Marbles, granite and slabs attract a surcharge of 20% on top of 20% basic customs duty of 20%, down from 40%.
HOUSEHOLD ITEMS
Footwear and materials for manufacturing them face a surcharge of 18.5% while items like bicycles attract surcharge of 15% after a reduced basic customs duty of 20%.
Home furniture items, smart electricity meters, electronic toy parts attract the surcharge of 5% to 20%.