The customs duty reforms in India’s 2026–27 Union Budget, as explained by Vivek Chaturvedi of the Central Board of Indirect Taxes and Customs, show that trade policy is being used as a tool to support economic growth rather than just raise government revenue. By cutting or exempting duties on key inputs such as solar materials, critical minerals, defense repair equipment, healthcare drugs, and export-oriented goods, the government is lowering production costs and improving the global competitiveness of Indian manufacturers, especially in sectors tied to Make in India and export growth. At the same time, higher duties on certain finished products, like imported umbrellas, are meant to protect domestic MSMEs from being undercut by cheaper foreign imports. Beyond tariff changes, procedural updates—including faster customs clearance, expanded digital systems, longer validity for advance rulings, and greater flexibility for exporters through courier limits and duty deferment—reduce delays and uncertainty, which is particularly beneficial for small businesses. Changes to baggage rules and duty-free allowances also show how these reforms affect everyday consumers, not just firms. Overall, the reforms aim to strike a balance between protecting domestic industries, boosting exports, integrating India into global supply chains, and making the customs system simpler, more predictable, and more efficient.
https://www.edexlive.com/news/customs-duty-reforms-aim-to-boost-industry-exports-and-ease-of-living-cbic-chairman
I like how your post highlights how India lowered duties on valuable inputs to help manufacturers compete globally, but also mentions that they have higher duties on a range of finished products, providing a layer of protection for small domestic businesses. Thank you for sharing.
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