New Delhi, GTRI on Thursday said implementation of key strategic reforms such as simplification of customs structure, GST and de-incentivising low value-added electric vehicles will help India ensure its sustainable growth and inclusive growth.
Economic think tank Global Trade Research Initiative (GTRI) also said that India stands at the cusp of a transformational era and there is an urgent need for macroeconomic reforms.
“From simplifying the complex customs structure to pioneering a regulatory sandbox for cryptocurrencies, and from boosting the MSME sector through GST (Goods and Services Tax) reforms to strengthening our energy security, this agenda is a strong, Lays the foundation for a resilient and globally competitive India,” it said.
It said the existing basic customs duty structure, which affects imports worth US$680 billion, has not been reviewed in 20 years, leading to more than 27 different duty rates and more than 100 distinct or mixed duty slabs. Are.Currently, 85 per cent of customs revenues come from less than 10 per cent of tariff lines (or product categories), while 60 per cent of tariff lines contribute less than 3 per cent of revenues.
"With some adjustments, the average import duty can be reduced from 18.1 per cent to below 10 per cent without affecting key products." Simplification is necessary to avoid global criticism, as former US President Donald Trump told India. Where was the Tariff King?" it said.
The think tank suggested increasing the GST exemption limit for the annual turnover of a firm from Rs 40 lakh to Rs 1.5 crore as it would be transformative for India's MSME sector, boosting job creation and growth.Firms with a turnover of less than Rs 1.5 crore account for more than 80 per cent of the registrations but contribute less than 7 per cent of the tax collected, it said, adding that an annual turnover of Rs 1.5 crore is equivalent to a monthly turnover of Rs 12-13 lakh, i.e. Only Rs 1.2. Lakhs at 10 percent profit margin.
"The new limit will reduce the burden of the GST system from 1.4 crore taxpayers to less than 23 lakh, thereby introducing invoice-matching for 100 per cent compliance, eliminating fake invoices and tax evasion. 7. Increase in tax collection The percentage will be offset by tax loss,” said Ajay Srivastava, founder of GTRI.
It also asked the government not to encourage low value-added electric vehicles (EVs).Due to US and EU restrictions on Chinese EVs, China is shifting its focus to Southeast Asian markets including India.
"In a few years, every third EV on Indian roads, as well as many passenger and commercial vehicles, could be made by Chinese companies independently or through joint ventures with Indian companies," it said.
“Since current EVs are heavily dependent on Chinese batteries and parts, which account for 60-90 per cent of their cost, India should avoid encouraging low value-added EVs,” GTRI said, adding that there is a need to increase EV adoption. The key is to balance protecting and growing the domestic auto industry.
Furthermore, it suggested focusing on developing capacity to produce inputs and intermediates for both chemical and fermentation-based active pharmaceutical ingredients (APIs).
India imports 70 per cent of its APIs and over 80 per cent of biosimilars from China, posing a significant threat to the industry and national security.It said simplification of e-commerce export rules will help boost India's exports.
There are more than 20 lakh companies in India that produce good quality products and services but less than one lakh of them export.
Srivastava said, “Simplification of RBI, banking, customs, GST and DGFT regulations related to e-com exports will help them start exporting handicrafts, jewellery, ethnic wear, decorative paintings, Ayurveda and many other products. "
He said India is dependent on China for 30 percent of its industrial product imports, with imports having increased tenfold in the last two decades.
China is also the top import supplier in every major industrial product category.He said, “As Chinese companies are expanding their operations in the Indian markets, imports are expected to increase further. This increasing dependence requires a strategic approach to cut dependence on China."
Economic think tank Global Trade Research Initiative (GTRI) also said that India stands at the cusp of a transformational era and there is an urgent need for macroeconomic reforms.
“From simplifying the complex customs structure to pioneering a regulatory sandbox for cryptocurrencies, and from boosting the MSME sector through GST (Goods and Services Tax) reforms to strengthening our energy security, this agenda is a strong, Lays the foundation for a resilient and globally competitive India,” it said.
It said the existing basic customs duty structure, which affects imports worth US$680 billion, has not been reviewed in 20 years, leading to more than 27 different duty rates and more than 100 distinct or mixed duty slabs. Are.Currently, 85 per cent of customs revenues come from less than 10 per cent of tariff lines (or product categories), while 60 per cent of tariff lines contribute less than 3 per cent of revenues.
"With some adjustments, the average import duty can be reduced from 18.1 per cent to below 10 per cent without affecting key products." Simplification is necessary to avoid global criticism, as former US President Donald Trump told India. Where was the Tariff King?" it said.
The think tank suggested increasing the GST exemption limit for the annual turnover of a firm from Rs 40 lakh to Rs 1.5 crore as it would be transformative for India's MSME sector, boosting job creation and growth.Firms with a turnover of less than Rs 1.5 crore account for more than 80 per cent of the registrations but contribute less than 7 per cent of the tax collected, it said, adding that an annual turnover of Rs 1.5 crore is equivalent to a monthly turnover of Rs 12-13 lakh, i.e. Only Rs 1.2. Lakhs at 10 percent profit margin.
"The new limit will reduce the burden of the GST system from 1.4 crore taxpayers to less than 23 lakh, thereby introducing invoice-matching for 100 per cent compliance, eliminating fake invoices and tax evasion. 7. Increase in tax collection The percentage will be offset by tax loss,” said Ajay Srivastava, founder of GTRI.
It also asked the government not to encourage low value-added electric vehicles (EVs).Due to US and EU restrictions on Chinese EVs, China is shifting its focus to Southeast Asian markets including India.
"In a few years, every third EV on Indian roads, as well as many passenger and commercial vehicles, could be made by Chinese companies independently or through joint ventures with Indian companies," it said.
“Since current EVs are heavily dependent on Chinese batteries and parts, which account for 60-90 per cent of their cost, India should avoid encouraging low value-added EVs,” GTRI said, adding that there is a need to increase EV adoption. The key is to balance protecting and growing the domestic auto industry.
Furthermore, it suggested focusing on developing capacity to produce inputs and intermediates for both chemical and fermentation-based active pharmaceutical ingredients (APIs).
India imports 70 per cent of its APIs and over 80 per cent of biosimilars from China, posing a significant threat to the industry and national security.It said simplification of e-commerce export rules will help boost India's exports.
There are more than 20 lakh companies in India that produce good quality products and services but less than one lakh of them export.
Srivastava said, “Simplification of RBI, banking, customs, GST and DGFT regulations related to e-com exports will help them start exporting handicrafts, jewellery, ethnic wear, decorative paintings, Ayurveda and many other products. "
He said India is dependent on China for 30 percent of its industrial product imports, with imports having increased tenfold in the last two decades.
China is also the top import supplier in every major industrial product category.He said, “As Chinese companies are expanding their operations in the Indian markets, imports are expected to increase further. This increasing dependence requires a strategic approach to cut dependence on China."
