New Delhi, Jan 17 (PTI) The government should impose duty on imports of capital goods as the domestic industry is facing cost disadvantage of 11-22 per cent, a FICCI study said.

Exemptions from import duties for various projects have led to over five times increase in India's imports from USD 6.5 billion in 2003-04 to USD 30 billion in 2008-09, it said.

"...these (capital goods) imports are now hurting the domestic industry and have captured significant market share of various capital goods in the country," FICCI said.

As a result of various exemptions like zero customs duty on capital goods imports and other disability factors, the cost disadvantage to the domestic industry as compared to foreign suppliers comes in range of 11-22 per cent, it said.

Import duty on capital goods proposed to address domestic industry cost disadvantage and market displacement from exemptions. Impose duty on imported capital goods to correct competitive imbalance created by zero customs duty and related exemptions. These concessions have driven a substantial rise in capital goods imports and produced a cost disadvantage to domestic manufacturers of approximately 11-22 percent, enabling foreign suppliers to capture market share; the association recommends reinstating or imposing import duties to restore competitive parity.