Amid concerns of cheap goods flooding the market and pushing out domestic manufacturers, the government is all set to clamp down on import of furniture. With the commerce department having already undertaken a detailed analysis on furniture imports, an official decision is expected over the next few days.
As a part of a strategy to boost the 'Make in India' initiative, the government over the last few months has stepped up its effort to reduce non-essential imports. In fact the government has identified over 350 non-essentials imports on which quality standards, higher duties as well as licensing (as opposed to free imports) are being worked out. The decision to clamp down on import of furniture is a part of the larger objective. If reports are to be believed, the ministry has proposed to increase import duty on wooden furniture to 30% from the current 20%.
According to industry analysts, over the last few years furniture imports have emerged as an area of concern owing to a massive problem of under-invoicing. The value of the goods being shipped into the country is shown to be lower than the actual import price, thereby denying customs duty to the exchequer. As per industry reports, in 2018-19, furniture imports were estimated at $1.8 billion (around Rs 12,500 crore), of which office furniture was largely ‘Made in China’ and suffered from poor quality. Commerce department data shows that out of the $1.8 billion furniture import close to $1 billion came from China. The trend continued between April and November 2019, with imports estimated at around $1.1 billion, of which Chinese shipments were about $637 million.