Budget 2025: Customs duty cut on several products to boost domestic manufacturing
NEW DELHI : Union Finance Minister Smt Nirmala Sitharaman announced a host of changes in basic customs duty (BCD) for several products on Saturday while presenting the first full Union Budget of Prime Minister Shri Narendra Modi’s third term in office.
Drugs import
In a big relief to cancer patients and those suffering from rare diseases and other severe chronic diseases, Finance Minister Nirmala Sitharaman proposed to fully exempt 36 life-saving drugs and medicines from basic customs duty.
“I also propose to add six lifesaving medicines to the list, attracting concessional customs duty of 5 per cent. Full exemption and concessional duty will also respectively apply on the bulk drugs for manufacture of the above,” the FM said.
Specified drugs and medicines under Patient Assistance Programmes run by pharmaceutical companies are fully exempt from BCD, provided the medicines are supplied free of cost to patients.
Lithium-ion battery
Nirmala Sitharaman announced the inclusion of 35 additional capital goods for EV battery manufacturing and 28 additional capital goods for mobile phone battery manufacturing.
“This will boost domestic manufacture of lithium-ion batteries, both for mobile phones and electric vehicles,” she said.
Textiles
To boost the production of technical textile products such as agro-textiles, medical textiles and geotextiles, the finance minister proposed to add two more types of shuttle-less looms to the list of fully exempted textile machinery.
She also proposed to revise the basic customs duty rate on knitted fabrics covered by nine tariff lines from “10 per cent or 20 per cent” to “20 per cent or ₹115 per kg, whichever is higher.”
Domestic manufacturing
The government proposed a full exemption on cobalt powder and waste, the scrap of lithium-ion batteries, lead, zinc and 12 more critical minerals.
“This will help secure their availability for manufacturing in India and promote more jobs for our youth,” Sitharaman said.
Seafood
The BCD on Frozen Fish Paste (Surimi) is reduced from 30 per cent to 5 per cent. The Finance Minister also proposed reducing the BCD from 15 per cent to 5 per cent on fish hydrolysate for the manufacture of fish and shrimp feeds.
Shipping
The government proposes to continue the exemption of BCD on raw materials, components, consumables or parts for the manufacture of ships for another ten years.
I also propose the same dispensation for shipbreaking to make it more competitive,” Nirmala Sitharman said.
Telecom
Nirmala Sitharaman proposed to cut the BCD from 20 per cent to 10 per cent on Carrier Grade ethernet switches to make it at par with Non-Carrier Grade ethernet switches.
Electronic goods
The government proposes raising the BCD on Interactive Flat Panel Display (IFPD) from 10 per cent to 20 per cent and reducing the BCD to 5 per cent on Open Cell and other components.
“To further boost the manufacture of such Open Cells, the BCD on these parts will now stand exempted,” she said.
Leather
Nirmala Sitharaman proposed to fully exempt BCD on Wet Blue leather to facilitate imports for domestic value addition and employment. She also proposed to exempt crust leather from 20 per cent export duty to facilitate exports by small tanners.