Not so long ago, the customs duty in India was over 50%. There is hardly any empirical evidence to suggest that a high incidence of customs duty resulted in increased manufacturing base. Else, it would potentially increase the cost of manufacturing in India for this growing sector.Likewise, hike in import duty on parts of motor vehicles and bikes. This, again, needs to be evaluated whether there is an immediate potential for domestic manufacturing. Germany has reportedly questioned India’s decision to raise customs duty on motor vehicles parts.

Source: Economic Times February 21, 2018 17:56 UTC