India Imports

Indian Import Policy

Import is the antonym of export. In the terms of economics, import is any commodity brought into one country
from another country in a legal way. The
economic needs of the country, effective use of
foreign currency are the basic factors which influence India's import policy. There are mainly 3 basic objectives of
the Indian import policy :

 To make the goods easily available.

 To simplify importing license.
 To promote efficient import substitution.

Current Scenario of Imports in India

There are few goods which cannot be imported namely tallow fat, animal rennet, wild animals, unprocessed ivory
etc. Most of the restrictions are on the ground of security, health, environment protection etc. Imports are allowed
free of duty for export production. Input output norms have been specified for more than 4200 items. The norms
tell about the amount of duty free import of inputs allowed for specified products. There are no restrictions on
imports of capital goods. Import of second hand capital goods whose minimum residual life is of five years is
permitted. Export Promotion Capital Goods (EPCG) scheme provides exporters to import capital goods at a
concessionary custom rates. In the past 30 years Indian imports have risen quite dramatically. At present imports
accounts for 17% of the GDP. Capital goods have been continued to be imported and in the last three years,
their share has fallen from 25% to 22%. 

Major Indian Imports

There are facilities available for the service industries to enjoy the facility of zero import duty under EPCG
scheme. Some of the major imports of India are edible oil, newsprint, petroleum and crude products, crude
rubber, fabrics, electronic goods etc.

Problems due to Large Import of Products

The recent trend of imports is of some concern. The regular imports of oil reflect upon the fact that India is not
able to produce the quantity of oil required in India. Moreover the increase in the imports of products also
highlights the fact that the Indian domestic industries need to be developed. High cost of imports also put
pressure on the foreign exchange reserves.
The economic needs of the country, effective use of foreign exchange and industrial as well as consumer
requirements are the basic factors which influence India's import policy. On the import side the policy has three
objectives:

1. to make necessary imported goods more easily available, including essential capital goods for
modernizing and upgrading technology;
2. to simplify and streamline procedures for import licensing;
3. to promote efficient import substitution and self-reliance.

There are only 4 prohibited goods: tallow fat, animal rennet, wild animals and unprocessed ivory. There is a
restricted list, but most of the restrictions are on grounds of security, health and environmental protection or
because the goods are reserved for production by small and tiny enterprises, which are home-based or village-
based and which require low skills and employ a large number of people. But the policy of restricting import of
consumer goods is changing. 

The Indian government's clearly laid down policy is to achieve, through a series of progressive steps, the average
tariff levels prevalent in the ASEAN region. The basic customs tariff rate now ranges from 0 to 40% plus
additional duty of 2%; the average rate is about 30%. 

Imports are allowed free of duty for export production under a duty exemption scheme. Input-output norms have
been specified for more than 4200 items. These norms specify the amount of duty-free import of inputs allowed
for specified products to be exported. 

There are no quantitative restrictions on imports of capital goods and intermediates. Import of second-hand
capital goods is permitted provided they have a minimum residual life of 5 years. There is an Export Promotion
Capital Goods (EPCG) Scheme under which exporters are allowed to import capital goods (including computer
systems) at concessionary customs duty, subject to fulfillment of specified export obligations. Service industries
enjoy the facility of zero import duty under the EPCG Scheme. Likewise, hospitals, air cargo, hotels and other
tourism-related industries. Software units can use data communication network to export their products.