Impact of 2021 Budget on Indian Exporters and Importers
The global pandemic in 2020 brought on uncertain times and a slowdown in the economy. Those working in international trade were particularly affected by the pandemic’s fallout as countries went into lockdown and quarantine, putting an abrupt halt to regular business and international shipments even after payment to supplier. Obviously then, the 2021 government budget announcement was one of the most anticipated budgets in independent India’s history.
Not just exporters and importers, almost every sector of the economy was eager to know what it had in store for them. There was some cause for cheer among exporters as the Finance Ministry announced customs duty on several items to promote domestic manufacturing.
Here is an analysis of how the budget has impacted India’s exporters and importers:
Boost for exports in textiles and agriculture
In order to equip the textile industry to become globally competitive, attract huge investments, and boost employment, a scheme called Mega Investment Textiles Parks (MITRA) will be launched. As many as seven textile parks will be set up over the next 3 years. They will create a world-class infrastructure with plug-and-play facilities to create global champions in exports.
This scheme will be in addition to the production-linked incentive (PLI) scheme already announced for this sector in November 2020. Together, they are expected to enable manufacturing companies to become an integral part of the global supply chains. Financial transactions in international trade are no more of a hassle because of seamless fnb international payments.
Considering the fact that the textiles sector generates employment and contributes significantly to the economy, the government has taken steps to lower basic customs duty on the raw materials required in man-made textiles. These raw materials include caprolactam, nylon chips, nylon fiber, and yarn. These customs duty reductions will help the textile industry to a large extent.
To boost value addition in agriculture and allied products and scale up their exports, the scope of ‘Operation Green Scheme’ has been expanded. Till now applicable to tomatoes, onions, and potatoes only, this scheme will be extended to 22 perishable products. Overall, the thrust is towards easy access to raw materials and boosting exports of value-added products.
A helping hand to MSMEs, electronics manufacturing sector
Domestic manufacturing of electronic equipment has grown rapidly over the last decade. Today, India is a prominent exporter of mobile phones, smart-phones, and chargers. For greater domestic value addition, the budget has announced removal of a few custom duty exemptions on importing parts of mobile chargers and sub-parts of mobile phones. Further, some mobile parts will move from a ‘nil’ rate to a moderate 2.5%.
The budget has also announced a few measures to help the MSME sector get back on track after the setback caused in the pandemic year. There has been an increase in basic customs duty from 10% to 15% on the import of steel screws and plastic builder wares. On prawn feed, it has been increased from 5% to 15%. Exemptions on the import of duty-free items have also been slashed as an incentive to exporters of garments, leather, and handicraft items. Customs duty has been increased on finished synthetic gemstones to encourage their domestic processing.
Some exemptions in imports
Anti-dumping duty is being temporarily revoked till September 2021, on imports of certain items. These include steel products of various grades originating in China, Brazil, Germany, Vietnam, and Korea. Also, anti-dumping duty has been discontinued on certain cold-rolled stainless steel products from China, Korea RP, European Union, South Africa, Taiwan, Thailand, and the United States of America upon expiry of the anti-dumping duty.
Countervailing duty has been temporarily revoked on imports of certain hot rolled and cold rolled stainless steel flat products originating in or exported from China and flat products of stainless steel, originating in or exported from Indonesia.
Other miscellaneous changes include exemption to temporary imports of costumes and props by film-makers. The project import benefit is being extended to all high-speed railway projects. On the other hand, exemption to items of machinery, instruments, appliances, components, or auxiliary equipment for solar power generation projects is being rescinded in order to encourage indigenous manufacturing of the same.
Also, the concession rate of basic customs duty is being withdrawn on import of ink cartridges, ribbon assembly, ribbon gear assembly, ribbon gear carriage, used in printers and computers.
Considering the uncertainties brought on last year, the budget has hit all the right notes to promote an ‘Atmanirbhar bharat’ or self-reliant economy and boost exports.
Export & Import
Impact of 2021 Budget on Indian Exporters and Importers
There are a few key shipping documents that the exporter must always be ready with. The export procedure and documentation [https://web.tazapay.com/export-documents-what-you-need-to-get-started/] required are quite simplified and explained intricately on the Singapore Customs website. When sending your goods to another country, there is a checklist of the most common export documents that will be necessary to be included with your shipment. The eventual documentation that needs to be provided w
When getting into international trade, having an in-depth comprehensive knowledge about the import and export procedure [https://tazapay.com/blog/import-and-export-procedure-in-india-all-you-need-to-know] of the country one is doing business with is extremely critical. Exporting is a big deal and one has to consider various aspects when getting into exporting such as how friendly the trade laws of the country are, how complicated is the import and export procedure, analysis of the place, regula
The right location and a sound business strategy are important prerequisites for starting a trading company in any part of the world. Over the years, Singapore has emerged as one of the most favourable destinations for entrepreneurs planning to set up a trading company. Singapore is truly an attractive business destination with the second-highest GDP in the world and a business-conducive environment. Nevertheless, like every country, Singapore also has certain regulations. You need to know these