Government Cuts Customs Duties to Boost Domestic Manufacturing and Exports

The government announced a major reduction in customs duties on various products, including gold, silver, and key electronic items, in an effort to reduce input costs, enhance export competitiveness, and boost domestic manufacturing. The move is expected to aid in local value addition and simplify taxation.

In a significant policy shift, the government on Tuesday announced the reduction of customs duties on a wide range of products, including gold, silver, critical minerals, and electronic items. The aim is to reduce input costs, foster value addition, promote export competitiveness, and bolster domestic manufacturing.

The reductions will also apply to sectors such as textiles, steel, marine products, and medical equipment. The duties on precious metals like gold, silver, and platinum have been significantly lowered, with the basic customs duty on gold and silver bars reduced from 15 per cent to 6 per cent. This move aligns with long-standing demands from gems and jewellery exporters for lower import costs to boost exports and local production.

Finance Minister Nirmala Sitharaman emphasized the government's commitment to support domestic value addition and simplify taxation, acknowledging the potential Rs 28,000 crore annual revenue loss but emphasizing the long-term benefits. The reduction in customs duties is expected to drive down smuggling and address the country's import dependency on precious metals, which account for over 5 per cent of total imports.