The long awaited budget is now done away with. While we are still reeling from the impact, the market will now dust itself off and move on from here.
While the government hiking the long term and short term taxes on capital gains stole away most of the headlines, the reduction in import duties on some of the key items went largely unnoticed.
To begin with, what really is an import duty? They are taxes levied on goods when they are imported into a country. The amount is usually decided based on the value of the good. Reducing import duty on goods will lead to reduction in prices of the goods imported, leading to a rise in demand. The annual budget has made provisions for reduction on import duties on several important goods and products.
Here, we present to you a list of six items on which the government announed reduction in import duties:
1. Gold and Silver
The Indian government has reduced the import duty on gold from 10% to 6% and on silver from 10% to 6.5%. The reduction in duty is expected to boost demand and benefit the jewellery industry, particularly organized players.
Stock Beneficiaries: Titan, Kalyan Jewellers
2. Mobile Phones and chargers
The Indian government has reduced the import duty on mobile phones and chargers from 20% to 15%. This reduction in duty is expected to lead to a price drop of around 5-6% on mobile phones.
Stock Beneficiaries: Cellecor Gadgets, Aditya Vision, Redington India
3. Man Made Fibers and Textile Machinery
The Indian government has reduced the import duty on man-made fibers and textile machinery from 10% to 5%. As per the experts, the duty reduction will make Indian textiles more competitive and increase exports. The move will also benefit the entire textile value chain, from fiber producers to garment manufacturers.
Stock Beneficiaries: Grasim Industries, Aditya Birla Fashion
4. Specialty Chemicals and Chemical Machinery
The Indian government has reduced the import duty on specialty chemicals and chemical machinery from 10% to 5%. A lot of sectors will be positively impacted by this, namely Pharmaceuticals, Agrochemicals, Paints and Coatings, Adhesives and Sealants and Cosmetics and Personal Care.
Stock Beneficiaries: Aarti Industries, Sudarshan Chemicals
5. Capital Goods
The Indian government has reduced the import duty on capital goods from 7.5% to 5%. The reduced duty is expected to benefit the manufacturing sector, particularly industries like engineering, electrical, and electronics. The duty reduction will make it cheaper for companies to import machinery and equipment, leading to increased investment in the sector.
Stock Beneficiaries: L & T, BEML
6. Solar Gear
The Indian government has reduced the import duty on solar gear, including solar panels and modules, from 7.5% to 5%. The reduced duty is expected to benefit the renewable energy sector, particularly solar power generation. The duty reduction will make solar gear more affordable, leading to increased adoption and deployment of solar energy solutions.
Stock Beneficiaries: Oriana Power, Adani Green Energy
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