Union Budget 2024 |Cut in customs duty, credit guarantee scheme for MSMEs to help boost manufacturing, exports: Experts

New Delhi: The Budget announcements such as cut in customs duties on range of goods, credit guarantee scheme for MSMEs and setting up of e-commerce hubs will help boost domestic manufacturing and exports, experts said.

They said reducing customs duty on goods like spandex, leather and marine goods will help industry to be self-reliant.

Apparel Export Promotion Council (AEPC) Chairman Sudhir Sekhri said the garment industry hails expanding the list of trims and embellishment under IGCR (import of goods at concessional rates), which will help increase shipments of ready-made garments.

"The enhancement of limit under credit guarantee scheme for MSMEs in the manufacturing sector, grant of one month wage to new entrants in all formal sectors up to Rs 15,000, EPFO contributions for new manufacturing employees for four years, and upgrading the industrial training institutes will help the garment industry scale up and be future ready," Sekhri said.

Council for Leather Exports (CLE) Chairman Rajendra Kumar Jalan said rationalisation of export duties and inclusion of more inputs, including wet blue chrome tanned leather, wet white leather, crust leather and finished leather under a duty-free scheme will help create more jobs and increase shipments.

"On the export duty front, the export duty on wet blue and crust leather has been brought down from 40 per cent to 20 per cent. This will facilitate export of value-added processed leathers from the country, as there is a huge demand for these leathers in the global market," Jalan said.

He hoped that the government will remove this export duty for crust leathers so as to achieve the objective of enhancing the export of value added leathers by $1 billion in the next 2-3 years.

Hi-Tech Gears Ltd Chairman Deep Kapuria said the Budget has not made any major changes in the existing import duty rates barring very few sectors.

"This is a message to the large global companies who always prefer a low and predictable import tariff regime for their seamless operation of cross-border production network," Kapuria said, adding that elimination and cut in the import duty on 25 critical minerals, along with capital goods for manufacturing of solar cells and panels will give a big boost to not only renewable energy sector but many high-tech strategic sectors such as defense, electronics, space.

Chemical & Petrochemical Manufacturers' Association President Kamal Nanavaty said the Critical Mineral Mission will facilitate domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets.

"While thrust would be on developing domestic production capacity of critical minerals, but parallelly the Budget proposes to fully exempt customs duties on 25 critical minerals and reduce basic customs duty on two of them," Nanavaty said.

Startup firm WOCE (World of Circular Economy) Director Anup Garg said the abolition of the angel tax for all classes of investors is a welcome move that will certainly spur investments in startups, especially those with a vision for environmental sustainability.

"Most investors now wisely invest in forward-thinking companies, particularly those that consider the environment and human well-being," Garg said.

Saroj Kumar Mahapatra, Executive Director, PRADAN, said the Budget marks a significant step forward in agricultural development.

"By prioritising agricultural research focused on climate-resilient crop varieties, it aims to bolster future food security and mitigate inflation risks," Mahapatra said.

Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.