Manufacturing sector hit by inverted Customs duty

While the country is liaising with other countries through free trade agreements, the

Indian manufacturing industry is gradually losing its grip over the domestic market due to inverted Customs duty structure, a Ficci survey has said. According to the survey, released today, around 20 key industrial products in India face an inverted Custom duty structure because of trade pacts and the duty changes in Budget.

The inverted duty structure is a situation where the duty on the finished product is lower than that on raw materials and intermediate products. "This acts as a disincentive for the domestic manufacturer as he has to pay a higher price for the raw material while the finished product is imported at lower duty," the survey said. Ficci has underlined the need for taking early action on the recommendations of the Anwarul Hoda Committee on inverted duty structure.