Centre mulls hiking duties on farm produce to maximum allowed limit to arrest fall in prices

NEW DELHI: The government is exploring options of whether it can increase the import duty to the maximum allowed limit for short periods to tide over the trend of falling prices of farm produce due to cheap imports. Sources said bumper domestic production and similar increase in production across the globe has triggered this proposal. 

The moves comes against the backdrop of the government raising import duty on a range of goods in the Budget, a measure which has attracted criticism for being protectionist. The Budget raised duties on a host of products from kites, footwear to mobile phones to promote "Make in India" and shield small and medium enterprises from any surge in imports. 

A committee of secretaries under the Cabinet secretary will consider all options for raising duties for farm products before recommending any action plan for fixing the “bound tariff rates” for some of the key items. The decision was taken at a meeting of group of ministers headed by finance minister Arun Jaitley on Thursday. 

The Budget announcement to increase duties on a host of products from kites, footwear to mobile phones has been dubbed as a move towards protectionism. 

Bound rate is the maximum rate of tariff allowed by World Trade Organization (WTO) to any member country for imports from another member nation. Under this norm, each country commits to a ceiling on customs duties (tariff) on a certain number of products and no country can raise duties above the bound rate it has committed. 

Sources said the agriculture ministry had proposed increasing the import duty for crude palm, refined palm, chickpeas and chana. “There was a view to look into all aspects of whether we can go to the extent of bound rates for a few months. Once the maximum limit is fixed, the next year government has to reduce the rate. So, there is also a thought whether it would leave the government no option to hike import duty if the crisis deepens,” said an official, who did not wish to be named.