Need to restore duty free status on imported raw materials used in export oriented sectors

The Finance Ministry is mulling over restoration of the duty free import of the exports inputs used by the handicrafts, textiles and leather sectors.

Withdrawal of the duty free status on a welter of products mentioned in the Budget 2021-22 may have impacted the exports worth Rs 5000 crore, hence Financial Ministry is considering the recommendations of Commerce Ministry to restore the duty free status to such goods.

The budgetary propositions of imposing custom duty ranging from 7.5 to 15 per cent on several items to create a level playing field for domestic players and farmers may be adversely affecting the goods of export inputs.

According to earlier representations by several export promotion councils, apart from adding cost to the exporters, the withdrawal of duty free benefits would have also hampered the quality and looks of exported items marked by the overseas buyers and hence resulted in cancellation.

As majority of items such as silk yarn, metals, veneers, sewing thread, motifs and many others are not  manufactured in India but  they were earlier qualified  for duty free imports, the cost of finished products is going up  besides, such foreign items are specified by overseas buyers to be used in the products to be exported to them in the view of quality considerations.