New Delhi, Feb 3 (PTI) – India has reduced its average customs duty rate from 11.65% to 10.66%, bringing it closer to the tariff levels prevalent in Southeast Asian nations. This move is part of the government's broader effort to simplify the tariff structure, enhance the competitiveness of domestic industries, and create a more business-friendly tax regime, said Central Board of Indirect Taxes & Customs (CBIC) Chairman Sanjay Kumar Agarwal on Monday.
Speaking at an industry interaction, Agarwal highlighted that the duty rationalization aligns India’s tariffs with those of the ASEAN (Association of Southeast Asian Nations) bloc, which includes countries such as Indonesia, Malaysia, Thailand, and Vietnam. He emphasized that this adjustment is crucial in countering the perception—particularly from developed nations like the United States—that India imposes excessively high tariffs.
The issue of India's tariff rates has been a point of contention, with former U.S. President Donald Trump’s administration labeling India as a "tariff king" and "tariff abuser." However, Agarwal pointed out that only a limited number of products fall within the highest duty brackets of 25% to 150%, while the majority of items are within the 0-10% range.
The latest Budget 2025-26 has further streamlined the customs duty framework. Finance Minister Nirmala Sitharaman announced a reduction in the number of tariff rates to just eight, including a ‘zero’ rate, making tax compliance simpler and boosting India's integration into global supply chains. This follows similar cuts made in the 2023-24 budget.
Additionally, the government has taken steps to ensure the availability of critical minerals essential for sectors such as semiconductor manufacturing, clean energy transition, and space exploration. Given that these minerals are largely imported, previous budgets have also seen reductions in duties on them. To encourage domestic recycling, duties on waste and scrap of these minerals have been removed.
This tariff rationalization is expected to enhance India’s trade competitiveness, facilitate ease of doing business, and position the country more effectively in the global economic landscape.
Speaking at an industry interaction, Agarwal highlighted that the duty rationalization aligns India’s tariffs with those of the ASEAN (Association of Southeast Asian Nations) bloc, which includes countries such as Indonesia, Malaysia, Thailand, and Vietnam. He emphasized that this adjustment is crucial in countering the perception—particularly from developed nations like the United States—that India imposes excessively high tariffs.
The issue of India's tariff rates has been a point of contention, with former U.S. President Donald Trump’s administration labeling India as a "tariff king" and "tariff abuser." However, Agarwal pointed out that only a limited number of products fall within the highest duty brackets of 25% to 150%, while the majority of items are within the 0-10% range.
The latest Budget 2025-26 has further streamlined the customs duty framework. Finance Minister Nirmala Sitharaman announced a reduction in the number of tariff rates to just eight, including a ‘zero’ rate, making tax compliance simpler and boosting India's integration into global supply chains. This follows similar cuts made in the 2023-24 budget.
Additionally, the government has taken steps to ensure the availability of critical minerals essential for sectors such as semiconductor manufacturing, clean energy transition, and space exploration. Given that these minerals are largely imported, previous budgets have also seen reductions in duties on them. To encourage domestic recycling, duties on waste and scrap of these minerals have been removed.
This tariff rationalization is expected to enhance India’s trade competitiveness, facilitate ease of doing business, and position the country more effectively in the global economic landscape.
Last updated by a enewsx: