FM targets single-digit customs duty slabs by 2027-28 Budget

The Story in Brief

Finance Minister Nirmala Sitharaman announced plans to complete customs tariff rationalisation by the Union Budget 2027-28, aiming to reduce the number of tariff slabs to a single digit. Speaking at the CD Deshmukh Memorial Lecture, she noted India currently has around 13 customs tariff slabs, though the government has already cut them to eight, including zero-duty, through FY24 and FY26 Budget measures. The average customs duty has declined to 10.66% from 11.65%, with further reductions expected as part of broader efforts to simplify trade complexities and boost competitiveness.

Sitharaman also highlighted India's ambition to become a developed nation by 2047, citing the country's recovery of global GDP share to 8.5% from under 3% in the 1970s. She stressed that government borrowing should fund productive assets rather than liabilities, noting capital expenditure has nearly tripled in five years. According to the IMF, India's general government debt stood at 83.4% of GDP in 2026. The rationalisation may benefit import-dependent sectors like electronics and automobiles but could challenge businesses historically protected by high tariffs.