Customs duty relief on 118 goods under review

The Indian government is currently conducting a review of customs duty concessions and exemptions for 118 goods as part of the budget 2027-28 process, according to sources familiar with the matter. The review, which covers concessions expiring on March 31 and September 30, 2027, includes a wide range of products such as components for power projects, textile machinery, battery scrap, photovoltaic cells, drugs, and optical fibre cables. These goods currently have basic customs duty rates ranging up to 30%.

The respective line ministries have reached out to the industry seeking input on whether these exemptions and concessional rates should be continued, withdrawn, or allowed to lapse. Industry has been asked to provide detailed justification supported by data on domestic production, imports, existing capacity, and planned investment in these goods.

In addition to the review of conditional exemptions, the government is also examining unconditional exemptions granted to 86 goods, including fuel oil, certain medicines, urea, stents, probiotics, waste and scrap of critical minor metals like gallium and germanium, and lithium-ion battery waste. Unconditional exemptions are full waivers of duty without requiring importers to fulfill post-import conditions.

The exercise of duty review and rationalization is a routine process aimed at correcting the inverted duty structure and promoting local manufacturing. The government's budget FY27 focused on tariff rationalization, with many conditional and unconditional exemptions reviewed, extended, and sunset clauses removed. Specific duties for consumer goods like umbrellas were also revised during this period.