SIAM Urges Government to Raise Import Duty on Commercial Tractors to 40% to Protect Indian Manufacturers

Key Highlights:

• SIAM seeks to raise import duty on commercial tractors from 10% to 40%.

• Proposal aims to curb low-cost CBU imports, especially from China.

• Higher duty will cover both BCD and AIDC on imported vehicles.

• SIAM says domestic EV and ICE manufacturers need better protection.

• Move is expected to boost local manufacturing and investments.

The Society of Indian Automobile Manufacturers (SIAM) has urged the Government of India to increase the import duty on commercial tractors and prime movers from the current 10% to 40%. According to the industry body, the move is necessary to protect domestic manufacturers from low-cost imports, particularly from China, and to strengthen local manufacturing in the commercial vehicle sector.

SIAM Raises Concern Over Low Import Duty

In a letter submitted to the Ministry of Heavy Industries (MHI), SIAM said the existing 10% Basic Customs Duty (BCD) on imported commercial tractors and prime movers is too low. These vehicles, which are mainly used for logistics and goods transportation, are being imported into India as Completely Built Units (CBUs).

SIAM stated that the low duty allows foreign companies to bring fully built electric (EV) as well as internal combustion engine (ICE) commercial tractors and prime movers into India at lower prices. As a result, overseas manufacturers can sell their products in the Indian market without investing in local manufacturing facilities.

Industry Wants Import Duty Increased to 40%

To address this issue, SIAM has requested the government to impose a uniform 40% import duty on imported CBU commercial tractors and prime movers. The proposed duty would include both the Basic Customs Duty (BCD) and the Agriculture Infrastructure and Development Cess (AIDC).

According to SIAM, the higher duty would create a more level playing field for Indian manufacturers and reduce the price advantage currently enjoyed by imported vehicles.

Focus on Supporting Domestic Manufacturing

SIAM highlighted that Indian automobile companies are making significant investments to manufacture EV commercial tractors and prime movers within the country. However, the availability of low-cost imported CBUs is making it difficult for domestic manufacturers to compete effectively.

The industry body also claimed that the current duty structure is encouraging foreign companies to dump their products in India, which could affect the growth of local manufacturing.

Expected Benefits of Higher Import Duty

SIAM believes that increasing the import duty to 40% would:

• Protect Indian manufacturers from low-cost imported CBUs.

• Encourage continued investment in domestic manufacturing.

• Promote local production of EV and ICE commercial tractors and prime movers.

• Reduce dependence on imported commercial vehicles.

• Strengthen India's commercial vehicle manufacturing ecosystem.

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CMV360 Says

SIAM has called on the government to revise the current import duty policy for commercial tractors and prime movers by increasing it from 10% to 40%. The industry body believes that a higher and uniform duty on imported CBU vehicles will help safeguard domestic manufacturers, encourage fresh investments in local production, and support the long-term growth of India's commercial vehicle industry.