"High import duty on capital goods increases the initial project costs and high project costs lead to higher costs of production. This makes Indian manufacturers uncompetitive vis-à-vis manufacturers in the neighbouring countries," O P Garg, president, Federation of Indian Export Organisations said.
The situation was alarming for capital-intensive industries like petrochemicals, Garg said, adding some form of protectionism was required for domestic industries.
However, due to India's commitment at the WTO, the only alternative was to reduce the import duty to the level of ASEAN countries, he added.
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