Govt plans restrictions on imports of products categorised as 'others'

Piyush Goyal said India is facing 'big' problem in imports of a category called "others" and in that category, all sorts of stuff is being imported into the country

Concerned over the rise in imports in the ‘others’ category, Commerce and Industry Minister Piyush Goyal on Wednesday asked those importers to seek HSN or tariff code within 30 days from the foreign trade office, failing which the government would impose strong restrictions on their inbound shipments.

In trade parlance, every product is categorised under an HSN code (Harmonised System of Nomenclature). It helps in systematic classification of goods across the globe.

Goyal said India is facing “big” problem in imports of a category called “others” and in that category, all sorts of stuff is being imported into the country. Citing an analysis, he said one out of the four products being imported in India is under this category.

Of over $500 billion worth of imports in 2018-19, the ‘others’ category accounted for over $100 billion. “I will follow the German model,” he said, adding he would wait for response from importers for next 30 days and thereafter, “I will restrict the import of any product which goes in the others category”.

At the CII’s National Standards Conclave, he said that importers will have to approach the ministry to take a special licence for that import without which "you cannot import any product in the others category". "Today, I would like to give a final announcement that I appeal to everybody who is importing any product or services into the country, please categorise your product into a respective HSN code under which it falls," he said.

Goyal asked the importers to approach their nearest DGFT (Directorate General of Foreign Trade) immediately.

"We will start the process to create a separate HSN code if it is not fitting into any existing code or amend the existing code... Very soon, I shall be coming out with serious consequences. The consequences could be a higher duty on products which come under others category," he added.

He also asked the DGFT to bring a trade notice immediately and "make it an absolute ultimatum either the import duty will be increased exorbitantly or a special duty imposed". This measure, he said, will help the government assess what is being imported into the country.

The minister added that no imports will be allowed without the HSN code into the country. On free-trade agreements, he said it is an unfortunate reality for India that the FTAs entered into with other nations have not led to the growth of trade and businesses.

Ranjeet Mahtani, partner Dhruva Advisors, said: "This proposal will impact India's trade patterns, when it has been concerned with bulging import bill, and there have been discussions on levy of a broader adjustment tax on imports to adjust for non-creditable local levies to support Indian manufacturing."

Sandeep Shah, partner, NA Shah Associates, said: "The government should release the draft code before implementing the higher tariff to avoid unintended consequences."