Hiking customs duty isn't protectionism, says Suresh Prabhu

NEW DELHI: Commerce and industry minister Suresh Prabhu has defended the government’s move to increase customs duty on a plethora of products and said it does not amount to protectionism. On the contrary, he said, customs duties are a legal instrument used in global trade.

“Increasing customs duty is not protectionism… It is an intervention allowed in the World Trade Organization,” the minister said. The Budget announced last week has proposed higher customs duty on goods including mobile phones, completely or semiknocked down automobile parts, electronics, capital goods, edible oils, footwear, imitation jewellery and juices.

The move is aimed at discouraging imports from China, incentivising domestic value addition and propelling the ‘Make in India’ mission.


HIGHER SUPPORT TO EXPORTS
The commerce ministry has also sought an increase in the rate of support under the interest subvention scheme for exporters to 5% from the existing 3%. Subvention rate is the interest subsidy that banks give on loans that are in turn reimbursed by the government.

Prabhu said incentives to exporters through various export-promotion schemes like Merchandise and Services Export from India Scheme would cross Rs 1 lakh crore in 2017-18.