With the latest announcement by the central government regarding the hike in the Import Tariffs, buying tech-savvy gadgets can be pricey. The rise in import duties is a move to arrest the declining value of rupee against the dollar. The government is pulling the reins and creating a barrier to the import of non-essential goods. There is a list of items which includes phones, voice over internet protocol, phone peripherals like wireless speakers and watches.
This decision made by the government can hurt the trade relations between the United States and China and also discomfort the dealing done by worldwide network equipment industries like ZTE Crop, Nokia, Xiaomi, Samsung, Huawei, and Cisco Systems Inc.
It’s a strategy to stabilize the value of rupee which has been sinking since almost a year. The rupee has gone down 14 percent and is still depreciating against the US dollar in the current scenario.
The picture is not very clear about which items are included in the list given by the government but smart wearable like smartwatches, phones, and VoIP (Voice over Internet Protocol) equipment are in the list among other different articles.
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The scheme, which comes into effect from Friday, will not only affect traders internationally but it will also have an impact on our Indian Telecomm giants like Bharti Airtel, Reliance Jio Infocomm, and Vodafone.
Like every decision, this one will also have some good and bad effects among the people.
High import tariff will slow down the rollout of high-speed data transmission and LTE networks which use optical fiber technology. However, it will benefit the local manufacturers.
This will not be the first instance that the government is taking such a step. The government justifies by calling it a promotion of ‘Make in India’ initiative. At the end of the previous year, the government imposed heavy taxes on mobile phones, television sets, and other electronic products. Then, again this year in February, the government listed 40 more items, including non-essential items. Last month, the government levied taxes on air-conditioners, aviation turbine fuel, speakers and refrigerators.
The latest rule will cost India in terms of the inflow of FDI’s (Foreign Direct Investment) but on the contrary, it will have a mild improvement in domestic and local business.