• The Finance Minister introduced a host of changes in Customs duty on several items in the Union Budget for 2022-23.
  • This would mean that imports become more expensive or cheaper depending on the change in customs duties.
  • The customs duty on umbrellas was doubled to 20%, while exemptions provided on import of parts of umbrellas were withdrawn.
  • Similarly, the customs duty on single or multiple loudspeakers, whether or not mounted in their enclosures was hiked to 20% from 15%.
  • Import duty was reduced for cut and polished diamonds, asafoetida, cocoa beans, methyl alcohol and acetic acid.
  • Duty on capital goods and project imports was rationalized by phasing out concessional rates and applying a moderate tariff of 7.5%.
  • Under Project Import Scheme, goods imported by a company are placed under a single tariff in the Customs Tariff Act, 1975 to facilitate faster assessment and clearances of goods.
  • The tariff changes will come into effect from 1st May 2022, as per the Finance Bill 2022-23.
  • The hike in import duty for items, such as umbrellas, are in line with the increase in import duty on toys last year.
  • The hike is being done for industries which manufacture items that do not deploy any major technology.
  • Umbrellas, for instance, are manufactured in small units spread across 10-12 districts with Kerala being the major manufacturing state.
  • The government seems to be offering protection to such industries.
  • It also falls in line with the other Budget announcement of popularising one station-one product to popularise local businesses and supply chains as announced in Budget 2022.
  • One station-one product as a concept aims to promote a local product from each stop of the Indian Railways by making the railway station of that area a promotional and sales hub for the product.
  • The concept of ‘One station one product’ has based itself on the successful One District One Product (ODOP) scheme. Based on a district’s strengths, ODOP has been a transformational step towards realising the true potential of a district, fueling economic growth, generating employment and rural entrepreneurship.


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