The Food Processing Industry has been given a lot of benefits in the 2007 Budget. Import duties have been reduced by 5% on a wide range of machines in a bid to boost investment and production in this industry. Excise duties have also been waived for a number of product categories, the most prominent of which are biscuits priced at below Rs. 50 per kg. This should substantially boost sales (and, hence, packaging requirements) for this end-use.
Import duties have also been reduced for a number of polymers and plastic films. Imports of the latter are expected to increase as there is also a tight situation in India on availability of oriented films.
The peak customs duty on paper has been reduced from 12.5% to 10%. This should reduce the landed costs of imported high-end and coated papers should foreign suppliers decide to pass on this benefit.
Customs duties on capital goods and project imports had already been brought down by 5% in January 2007. There have been no further changes in the2007 Budget.
The FM's proposal to reduce import duty on seconds and defective steel from 20% to 10% ostensibly meant for making steel scrap cheaper may end up having an impact on tin plate manufacturers. A lot of these seconds often find their way into packaging of edible oils and other food products.
“We are trying to find out whether our products will be affected due to proposed duty cut on seconds & defectives. If it does, we could be faced with a serious threat of imports in seconds & defectives.” said an apprehensive Bhushen Raina, MD, Tinplate Company of India (TCIL)
