Budget 2025: CBIC president defends the new tariff policy in India, and rejects protectionist claims

Sanjay Kumar Agarawal, head of the Central Council for Innight Taxes and Customs (CBIC), dealt with increasing concerns about the policy of importing tariffs in India, and rejected allegations from the United States that India has become increasingly protector. “India is unfairly targeted because many countries have measures to support local interests,” Agarawal stated during the interaction with Sidhath Zarrabi, business editor today.

Agarwal was placed in the comprehensive customs rationing exercise that was announced in the previous budget. “The Minister of Finance has announced a exercise to rationalize customs duties, and this has been widely done. We have passed all the elements of the customs tariff and we reviewed the rate of average,” he said.

The motivation behind the exercise was four main goals: providing adequate protection for certain sectors, simplifying the rate of average, maintaining the competitiveness in the industry, and enhancing the ease of doing business. To achieve these goals, seven high tariff rates – 25 %, 30 %, 35 %, 40 %, 100 %, 125 %, and 150 % – on industrial goods. However, agricultural goods and textiles were excluded from this exercise.

Agarwal explained that the revised rates are gradually applied based on the addition of value. “Taxes are imposed on raw materials and minerals by 0 % or 2.5 %. Taxes are imposed on the mediator by 5 % or 7 %, capital commodities by 7.5 %, and ready -made goods by 10 %. Supreme rates, such as 15 % and 20 %, were. He pointed out that only the products under production associated with incentives (PLI) or the gradual manufacturing program (PMP) or as an increase in imports was observed.

In an attempt to temporarily protect local industries, customs duties that exceed 20 % to 20 % have been reduced, and those that exceed 70 % decreased to 70 %. In addition, the infrastructure of agriculture and development (AIDC) has been adjusted, with lower rates applied to specific elements for the protection budget with a decrease in total rates.

In addressing the criticism associated with the United States and the references specified to the motorbike Harley Davidson, Aguardus explained, “The average customs duties rate decreased from 11.65 % to 10.66 %, by approximately 10 %, making it closer to the rates of Asian countries.” He added that for fully built motorcycles, the rate has been reduced from 50 % to 40 %, while imported motorcycles under fully climbed conditions (CKD) remain by 15 %.

About the broader criticism of the United States, Aguardus indicated that the import tariff in India is comparable, if not more liberal, than other major economies. “We have analyzed the best 30 imports from the United States, including crude oil and natural diamonds. The rates are either zero or between 0-10 %. There are no cases above 10 %,” he said.