CBIC Rolls Out Comprehensive Customs Duty Reforms to Boost Indian Economy

The Central Board of Indirect Taxes and Customs (CBIC) has unveiled significant customs duty reforms targeting key sectors such as renewable energy, MSMEs, healthcare, and exports. These measures aim to enhance domestic manufacturing, improve export capabilities, and streamline trade operations with a focus on simplifying customs processes and duty structures.

In a bid to strengthen the Indian economy, the Central Board of Indirect Taxes and Customs (CBIC) announced comprehensive customs duty reforms in the Union Budget 2026-27. These changes aim to bolster domestic manufacturing, escalate exports, and improve living standards for citizens.

CBIC Chairman Vivek Chaturvedi, while speaking to ANI, emphasized the strategic use of customs duty exemptions and protective measures across sectors such as renewable energy, defense, MSMEs, and healthcare. Exemptions in the energy sector, for instance, include sodium antimony, an essential component for solar panel production, while MSME protection involves a significant duty on imported umbrellas.

Further reforms include reduced duties in defense material and enhanced input limits for fisheries. For exporters, the government has improved duty-free input limits under aquaculture schemes from 1% to 3% of the FOB value, increasing operational flexibility. A notable reform enables Indian-flagged fishing vessels to harvest beyond territorial waters without classifying the catch as imports.

To streamline trade, the AEO framework has been strengthened, extending duty deferment from fortnightly to monthly. A new scheme grants AEO-equivalent benefits over two years. The validity of Advance Rulings on customs classifications has been increased to five years, while reforms in export procedures include removing the Rs 10 lakh cap on courier commercial consignments.

The CBIC's extensive IT investments aim to unify courier exports onto one customs platform, with integration expected within two years. An ongoing tariffication exercise seeks to standardize rates, enhancing certainty for businesses. Baggage rules have also been updated, increasing allowances for passengers and simplifying jewelry declarations.

Overall, the CBIC's reforms prioritize industrial protection, global competitiveness, and trade transparency, promising faster and more efficient operations.

(With inputs from agencies.)