The budget 2022–2023 is reshaping the furniture industry of India with infrastructure upgrades, exemptions, and investments.
The furniture industry was expecting a lot from the budget 2022–2023 for its growth and to make the industry more competitive. The budget announced on 31st January, 2022 met their expectations up to a great extent. Various initiatives, investments, revisions in duty, and tariff rates will make room for massive opportunities in the retail sector this year.
Let’s take a look at the budget 2022–2023 highlights that will impact the furniture industry.
Budget 2022 Impact On The Furniture Industry
PM GatiShakti initiative focuses on infrastructure upgrades. It includes the development of Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure for economic transformation, seamless multimodal connectivity, and logistics efficiency. The government has announced to invest INR 100 lakh-crore in PM GatiShakti National Master Plan. It incorporates the development of a digital platform to bring 16 Ministries together for integrated planning and coordinated implementation of infrastructure connectivity projects.
The up-gradation of the infrastructure under the PM GatiShakti initiative will make a positive impact on the furniture industry. Better connectivity throughout the country will boost transportation, making it fast, robust, and affordable. Better transportation will result in a price drop on the products and services offered by the retail industry. The main impact will be on small and medium enterprises. And the end-users as well.
In the year 2022–2023, 350 customs duty exemptions have been withdrawn to boost domestic manufacturing. A 7.5 percent tariff is applied on duty on capital goods and project imports to promote ‘Make in India’ and ‘Atmanirbhar Bharat’. The exemptions are removed from the products that are or can be manufactured in India and concessional duties are provided on raw materials that go into the manufacturing of advanced machinery that is not manufactured within the country.
The reduced customs duties on raw materials and intermediaries will support the domestic manufacturing of capital equipment and hence the small companies that want to manufacture in India. This will make the Indian furniture market more competitive which will lead to massive growth in the retail industry.
Exemptions are provided on various items including embellishment, trimming, fasteners, buttons, zipper, lining material, specified leather, furniture fittings, and packaging boxes to help Indian industries secure foreign markets.
Furniture export is a developing segment in India. The exemptions will boost the growth of furniture export businesses and help the country to recover from the impact of covid-19 on the economy.
Investment In The Furniture Industry
To push flat private investment levels and demand in the coming financial year, the government has increased the capital expenditure by over 35.4 percent from INR 5.54 lakh crore in 2021–2022 to INR 7.50 lakh crore in 2022–23. The expenditure has increased more than 2.2 times from the budget 2019–20 and constitutes about 2.9 percent of the country’s GDP.
It will encourage private and public investments in the country, overcoming the uncertainty caused by the pandemic. The retail sector of India has a lot of potential to attract FDI. The massive investment from the government will accelerate the virtuous cycle of investments and growth.