India heads into a very expensive Diwali! Flying, footwear ACs to jewelry, all to hit your pocket; check full list of items

In order to control widening CAD and depreciating rupee, the government has hiked import duty on some 19 items. Now this hike in import duty will impact you, especially when it comes to your festival season shopping. Yes, Indians prefer to make big purchases, cars to houses, during this auspicious period. We are just a few weeks away from back-to-back celebrations like Dhan Teras, Navratri and Diwali. Not only this, even from November, the wedding season begins. During these occasions, there is heavy buying of jewelry, home appliances, furniture, decoration item, washing machines and many more products. Some even plan to take their family and friends for a vacation outside the state or even abroad.  Guess what! Now your festive season is going to be very expensive and government is to be blamed. 

Starting with electronic items - the Air conditioners, Household Refrigerators and Washing machines less than 10 Kg has seen rise from 10% to 20% in  their custom duty. While, compressor for air conditioners and refrigerators has seen increase to 10% from 7.5%. 

Items like speakers, radial Car tyres, bath, shower bath, sink, wash basin, etc. of plastics has seen their custom duty now at 15% from 10%. Also, articles of plastic for conveyance and packing such as boxes, case, containers, bottles, insulated ware etc. Further,  trunks, suitcases, executive cases, briefcases, travel bags and other bags have seen a hike in their custom duty to 15% from 10%. Similar hikes were also made in miscellaneous items of plastics such as office stationery, fitting for furniture’s, decorative Sheets, statuettes, beads, bangles etc.

While no hike in gold import duty has been imposed, however, the government hiked import duties on diamond related products. 

Non industrial diamond (other than rough diamonds), i.e., cut and polished diamond have now import duty of 7.5% from previous 5%. Similar rates are on diamonds-semi processed, half cut or broken, and also lab grown diamonds. 

Going ahead, import duty of cut and polished coloured gemstones were also hiked to 7.5% from previous 5%. 

Import duty on articles of jewellery and parts thereof, of precious metals or of metal cladding with precious metal - and - articles of Goldsmith or silversmith wares and parts thereof of precious metal or of metal clad with precious metal saw hike to 20% from previous 15%. 

Moreover, footwear items was also not left, as now their import duty stands at 25% from previous 20%. Interestingly, government also hiked import duty on aviation turbine fuel (ATF) to 5% from previous 0%. 

Basic customs duties have been raised on 19 products that accounted for an import bill of approximately Rs 86,000 crore in FY18 by 2.5-10% points. 

According to Stewart Mackertich, in AC category companies like Voltas and Havells India will be impacted. While in radical car tyres, companies like CEAT, JK Tyre and Apollo Tyre will see negative pressure. As for ATF, all aviation stocks will face heat of this import duty hike. 

As for you, the customer, your buying on the above mentioned products will become expensive as companies will pass the burden on end user to recover losses arising from import duty. 

In Care Ratings view, while the rate hike was important in order to narrow down the current account deficit and bring the domestic manufacturing industry at par with the international markets post GST, the timing of the hike will have a major impact on the durables industry with the festive season just around the corner. 

The agency further explained,  also, the companies may not be able to pass on the price rise on account of muted demand in the domestic market post the price drop on washing machines and refrigerators during Jun-Aug 2018 due to GST led rate corrections. The final impact in terms of physical import of these goods as well as impact on price inflation is fuzzy. 

Talking about ACs, Phillip Capital said, “ACs mainly assembled in India, will see price hike by ~2.5 ‐ 3% as custom duty on compressors has increased by 2.5%.”

As for household refrigerators, the single door manufactured in India and  double door which are partially imported ‐ will get impacted. 

In case of washing Machine less than 10kg, Washing Machine less than 10kg - semi Automatic manufactured in India and fully automatic which is mainly imported ‐will get impacted.