NEW DELHI: Outlining a ten-point action plan that seeks to boost exports amid the slowdown caused by the global pandemic, the Confederation of Indian Industry (CII) has suggested that inverted duty structure in trade should be eliminated to accelerate value addition in the country.
“Import duties should be carefully calibrated. The general principle of higher duties on finished goods and lower/minimal duties on intermediates and raw material should be followed.Besides, tariff structure should be strategised to minimise duties on raw material and inputs and inverted duties must be redressed on immediate basis,” it said in its paper on export strategy.
Accordin to the industry body, the tariff structure under free trade agreements (FTAs) and the goods and
services tax (GST) should be examined to avoid inverted duties.
“Eliminate inverted duty arising out of FTAs and GST in the electronics sector, while the problem of inverted duty structure from raw material (PTA), fibre, yarn and fabric be corrected through a uniform rate of GST applied across the sector, ideally at five per cent.” Calling for stability in trade policies, CII also said that the the country must aim to increase its share in global merchandise trade to five per cent and in services export to seven per cent by 2025.
India’s share in global merchandise exports is 1.67 per cent, with a low share in top globally traded items. In services, it currently enjoys 3.54 per cent share.
CII Director General Chandrajit Banerjee said the pandemic has impacted world trade negatively. An open and facilitative import environment is required to attract global companies and ensure competitive access to intermediate goods. India’s cost of d ing business is a key disadvantage for export promotion.