Government to impose curbs on furniture and tyre imports for boosting domestic companies
In a bid to boost the domestic companies, the government is all set to impose curbs on import of various types of tyres. As cheap goods continue to flood the market, domestic manufacturers have been pushed out to some extent.
Over the next few days, an official decision is expected to be made by the concerned authorities. Detailed analysis on furniture imports have already been undertaken by the commerce department.
As a part of the strategy, the government has reducedthe non-essential imports in the recent months to boost ‘Make in India’ initiative, hit by the firms holding up investments due to economic slowdown. Over 350 non-essential imports have been identified by the government, ranging from toys and electronics to footwear and textile goods, on which quality standards, higher duties and licensing are being worked out.
According to Pawan Ruia, chairman of Ruia Group, the step can be rewarding for the local manufacturers. However, he believes that a balance between quality and productivity will be a key factor to make the presence felt in such a challenging environment.
In the recent years, furniture imports have also emerged as an area of concern, plagued by a massive problem of under-invoicing. The value of goods being shipped into the country is shown to be lower than the actual import price, denying customs duty to the exchequer.
The government officers and industry players suggested that office furniture was largely ‘Made in China’ and suffered from poor quality furniture, as the imports stood at an approximate figure of $1.8 billion in 2018-19. The trend continued with imports estimated at around 1.1 billion between April and November 2019, as the Chinese shipments stood at about $637 million.
On the other hand, for new and retreated tyres, the problem is largely due to shipments from Thailand and China, with tyre imports falling over 10 per cent in the last financial year. Around $127 million and $92 million of the $430 million of new imports were from Thailand and China respectively.
Apart from this, half of the retreated tyre imports came from Thailand. According to the government officer, the concern has there been last few years and there has been a discussion around restricting retreated tyres. This new step can however bring some respite to the local manufacturers, helping them make a mark in the coming months.