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Custom duty hiked on communication items; mobile phones, smartwatches to become expensive

The notification issued by Central Board of Excise and Customs (CBIC) stated that the said changes will be effective from October 12.

New Delhi: The Centre on Thursday hiked 10%  import duty on 17 items — which might affect the prices of Mobile phones and smartwatches in India.

The notification issued by Central Board of Excise and Customs (CBIC) stated that the said changes will be effective from October 12.

The 17 items which whose duties have been hiked include Wrist wearable devices (commonly known as smart watches),  Optical transport equipment, Combination of one or more of Packet Optical Transport Product or Switch , Optical Transport Network (OTN) products, IP Radios and all goods other than Printed Circuit Board Assembly (PCBA) including Cellular mobile phones, Base station and Optical transport equipment, Multiple Input/Multiple Output (MIMO) and Long Term Evolution (LTE) products.

Last month, the government had doubled the import duty on household items including air-conditioners, refrigerators, washing machines (less than 10 kg).

Fixing Current Account Deficit

  • Higher import duties will help to curb non-essential imports and improve the widening Current Account Deficit (CAD) gap.
  • After hike in import duty, prices of goods are expected to rise, which result in low demand and curbing imports. This move will lower down the competition for local manufacturers and will promote ‘Make in India’ goods in Indian market.
  • Higher crude oil prices and falling of domestic currency is widening the current account deficit (CAD), which has been a cause of concern for the government.  
  • The rupee touched a historic low of 74.50 to a dollar in an intra-day trade Thursday, before closing at 74.12. This year domestic currency has depreciated by over 13 %.
  • According to experts, the government’s efforts have been largely focused on controlling dollar outflow by imposing higher customs duties to curb demand and consumption of imported products.
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