EDITORIAL - Custom duty hike in India expected to cut imports of auto parts

Policy & Regulation

New duty structure is expected to increase local production of parts used in engine, transmission, brakes, suspension, and airbags

In its latest Union Budget for financial year (FY) 2018/19 presented last week, the Indian government has proposed to double basic custom duty on import of certain key components such as engines, transmission, brakes and others parts from 7.5% currently to 15%. The government also increased custom duty on import of radial tires for bus and trucks from 10% currently to 15%. In addition, the government increased import duty on lithium-ion batteries, a key component used in hybrids and electric vehicles, from 10% to 20%. Besides, custom duty on vehicles assembled locally using imported completely-knocked down (CKD) kits is also increased from 10% currently to 15%.

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