“Luxury is not a product, but an emotion that has aspirers and admirers. India will be a huge market for luxury goods and it will engage the world in terms of globalisation,” said Union Commerce and Industry Minister Kamal Nath, during signing of a memorandum of understanding (MoU) between the Confederation of Indian Industry (CII) and Altagamma, the association of Italian luxury goods manufacturers.
The minister also showed concern on revenue losses that are stemming from Indians shopping for luxury brands abroad, and hinted that government is considering rationalisation of import duty.
“India has high tariffs and we recognise that if you go abroad and buy, then it is a revenue loss for India. So, we are working on duties and countervailing duties,” said Nath.
He said that the commerce ministry has already forwarded a proposal to the finance ministry for duty cut. “We will continue to urge the finance minister for some rationalisation, and if he does that, then I do see some reforms,” he added.
In India, the category of import tax includes basic duty, which is zero for certain import items. However, the maximum basic duty imposed on an imported item is 65 per cent. Countervailing duties, excise duties and regulatory duties in addition to basic duty also form a part of the import tax. The total import tax levied on luxury items may rise as high as 150 per cent.