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Summary
The government's plan to rejig its customs regime is good news. Apart from easing compliance, it may yield an opportunity to reset tariffs for export orientation in adaptive response to today’s trade flux.
It would be music to many ears that India’s government is planning to overhaul its customs regime. The goal will not just be to ease compliance, but also bring down rates wherever they are higher than optimal, finance minister Nirmala Sitharaman said on Saturday at the HT Leadership Summit 2025.
The income tax regime’s revisions may be an example of what to expect. Just as “faceless” assessments took arbitrary harassment by officers out of the equation, we could see a similar alignment of policy and practice.
While no further specifics were revealed, it is clear that pain points in customs passage must go. Broadly, India needs a strategic rejig of import duties, with tariff rates set neither to maximize revenue collections nor grant industries undue protection, but to favour the global competitiveness of all that is made in India.
This exercise could be calibrated in adaptive response to today’s trade flux. Import bills on various factory inputs need to reduce; the rollback of a few quality control orders has set a direction that needs a tariff-policy follow-up. Final products may also benefit from exposure to foreign competition that aids the economy’s export orientation.
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