More Stories

Informist, Monday, Feb. 3, 2025

 

Please click here to read all liners published on this story

--CBIC head: India has very few items under high tariff rates 
--CBIC head: Average tariff rate has come down to 10.6% from 11.6% 
--CBIC head: Rationalising tariff rates to avoid bad optics 
--CONTEXT: CBIC head speaking FICCI's post-Budget event 
 

 

NEW DELHI - The government, through tariff rationalisation exercise, aims to address the false narrative, often floated by other countries, that India has a very high customs duty rate, Central Board of Indirect Taxes and Customs Chairman Sanjay Kumar Agarwal said Monday. India's average customs duty rate has come down to 10.66% from 11.65%, Agarwal added.

 

"There are very few items under high tariff rate, which are referred again and again by other countries as well as media (to float) that India has very high tariff," Agarwal said at the post-Budget conference organised by the Federation of Indian Chambers of Commerce & Industry. "By carrying out this exercise (of duty rationalisation), we could address the bad optics."

 

Agarwal's comment comes when US President Donald Trump has threatened to impose high customs duty on Indian goods as "reciprocal tariff". In fact, Trump had also called India a "tariff king" in September while campaigning before the US election.

 

The government has started a comprehensive review of the customs rate structure, and has lowered the number of customs duty rates to eight so far, including the zero rate. The review includes 8,500 tariff lines, which are mostly industrial goods, Agarwal said, adding that most tariff lines fall within the duty range of 0-10%. The government levies 150% duty on only one item-ethyl alcohol, and 125% on passenger vehicles.

 

In the Budget for 2025-26 (Apr-Mar), the government has also announced it will levy only one cess or surcharge on tariff lines subject to cess. As such, the government aims to exempt the social welfare surcharge on 82 tariff lines. "I propose to apply appropriate cess to broadly maintain effective duty incidence except on a few items, where such incidence will reduce marginally," Sitharaman said in the Budget speech for FY26. 

 

The government had announced a comprehensive review of the customs rate structure in the full Budget for FY25. It had also removed seven duty rates in July. Rationalisation of the customs duty structure has been a long-standing demand of industry. In their presentations to the finance minister before the Budget, the Confederation of Indian Industry and the Federation of Indian Export Organisations had suggested the government should address duty inversion in customs rates.  End

 

Reported by Krity Ambey and Sagar Sen

Edited by Vandana Hingorani

 

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.