Duty cut in Budget on certain inputs to boost exports, manufacturing: Commerce Min

New Delhi, Feb 2 (PTI) – The Commerce Ministry has welcomed the latest Budget announcement, emphasizing that reductions in customs duties across key sectors such as marine, chemicals, and critical minerals will bolster domestic manufacturing and enhance exports.

Among the major revisions, the duty on frozen fish paste (Surimi) and fish hydrolysate for aquatic feed has been significantly reduced—from 30% to 5% for Surimi and from 15% to 5% for fish hydrolysate. This move is expected to lower costs for the seafood and aquaculture industry.

Relief for the Chemical Sector​

In the chemicals sector, key inputs used in medicines and food processing have seen major reductions:

• Pyrimidine and piperazine compounds, widely used in pharmaceutical formulations, now attract a 7.5% duty, down from 10%.
• Synthetic flavoring essences, used to enhance the taste and aroma of food and beverages, have seen a drastic duty cut—from 100% to 20%.
• Sorbitol, a low-calorie sweetener, will now be taxed at 20% instead of 30%, providing a boost to the food and confectionery industry.

Critical Minerals: Encouraging Domestic Processing​

The government has also removed customs duties on key mineral scraps:

• Waste and scrap of lithium, cobalt, lead, zinc, and copper will now be duty-free, a sharp reduction from the previous 10% duty.
• Cobalt powder, an essential element in battery production and electronics, has also been exempted from the earlier 5% duty.

According to the Commerce Ministry, these measures will reduce import dependence, lower production costs, and improve India’s global competitiveness in critical sectors.

Revamping Bilateral Investment Treaties (BIT)​

Additionally, the Budget has proposed an overhaul of India's Model Bilateral Investment Treaty (BIT) to make it more investor-friendly. These treaties play a crucial role in safeguarding foreign investments and facilitating smoother negotiations for Free Trade Agreements (FTAs).

Currently, India is actively negotiating BITs with the UK, Saudi Arabia, Qatar, and the European Union (EU). The ministry believes that the revamped BIT framework will enhance India's ability to attract global investors.

With these strategic trade and investment reforms, the government aims to position India as a stronger player in global supply chains while fostering domestic production.