New Delhi

Union Finance Minister Nirmala Sitharaman announced that reducing customs duties will support domestic manufacturing, increase local value addition, enhance export competitiveness, and simplify taxation. The new customs duty rates will apply to items ranging from life-saving medicines to rare earth minerals and mobile phones.

Over the next six months, the government will review the customs duty rate structure to streamline it, ease trade, eliminate duty inversion, and reduce disputes. Customs duties on gold and silver will drop from 15% to 6%, and on platinum from 15.4% to 6.4%, to boost domestic value addition in gold and precious metal jewelry.

Additionally, the basic customs duty (BCD) on ferro nickel and blister copper has been removed to lower steel and copper production costs. Ankur Gupta, Indirect Tax Practice Leader at SW India, noted that reducing customs duties on precious metals will make raw materials more affordable, supporting the jewelry industry and encouraging local craftsmanship and export growth.

Sitharaman highlighted a significant increase in domestic mobile phone production and a nearly hundred-fold rise in mobile phone exports over the last six years. To benefit consumers, she proposed reducing the BCD on mobile phones, mobile PCBAs, and mobile chargers to 15%.

The Finance Minister also announced the full exemption of customs duties on 25 critical minerals, with reduced BCD on two of them. This will benefit sectors like space, defense, telecommunications, high-tech electronics, nuclear energy, and renewable energy, which rely heavily on these rare earth minerals.