How will china be harmed by reducing India's tariff?
The import duty on mobile parts in India has been reduced in january this year. In this budget also, people hope that the government can make some big decisions for this sector. The reduction of tariffs in india has given significant benefits to the indian mobile phone industry, while china may suffer losses due to this move in India. Understand it in this way that big companies like apple and Foxconn are now manufacturing the parts of their phones in India itself. This may reduce the market share of Chinese exporters, their export revenue may decrease.
What this tariff is and why it is imposed?
The tariff on mobile parts i.e. import duty is the tax that the government imposes on mobile parts imported from other countries. The main purpose of imposing this tariff is to protect domestic industries and limit foreign competition. Tariff rates can change from time to time and they depend on the economic policies of the government, trade agreements and the state of domestic industries.
Benefits of reduction in tariff on mobile parts
Reduction in import duty on mobile parts in any country reduces the production cost of mobile phone manufacturers, due to which consumers can get cheap mobile phones. Apart from this, low tariff encourages foreign companies to invest in india, which leads to the arrival of new technology and expertise in the country.
Understand three points
1. Promotion of domestic production: India's decision to reduce the import duty on mobile parts will make mobile parts cheaper for indian manufacturers, due to which they will be able to reduce the price of their products and compete with Chinese products. This may reduce the demand for Chinese products in the indian market. Apart from this, the promotion of the domestic mobile phone industry will improve the production capacity and quality of indian companies. This will make them more competitive against Chinese products.
2. Reduction in China's exports: india is a major importer of Chinese mobile parts. Reducing the import duty will encourage indian manufacturers, due to which the market share of Chinese exporters may decrease. Apart from this, the export revenue of China will be affected due to the reduction in exports from India. This can have a negative impact on their economy.
3. Increase in alternatives: By reducing import duty or making big decisions in this sector, indian manufacturers can also import mobile parts from other countries, which can reduce their dependence on Chinese products. This can affect China's global supply chain. Apart from this, due to strengthening trade relations with other countries, india can weaken as a major trading partner for China.
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