Agarbatti makers will now have to pay 2.5 times customs duty to import bamboos that are used in manufacturing agarbatti (incense stick). The government claimed this increase in the duties is taken in order to encourage the use of indigenous bamboo under Atma Nirbhar Bharat. The 25 per cent customs duty rate will apply uniformly on all kinds of bamboo imports also for the imports made by traders.
According to the government, the uniform custom duty rate will help to avoid misuse and rates related disputes. Thus, farmers will be benefitted from this move.
As per a tweet by the Central Board of Indirect Taxes, MSME agarbatti manufacturers will become more competitive now as earlier only the large agarbatti manufacturers were able to import bamboo at a lower rate.
Coronavirus outbreak has affected every sector of the economy including India’s centuries-old agarbatti industry. Agarbatti industry carries over three thousand manufacturers and employs lakhs of informal workers and agarbattis are exported to about 160 countries. However, the industry has lost its pace during the coronavirus lockdown and the sudden rise in the prices of raw materials may further increase the tension in the industry, at least for some time.
Meanwhile, several other countries are adopting protective policies to become self-sustainable, however, the perks of globalization cannot be ignored, said IMF Chief Economist Gita Gopinath