India’s Finance Minister Nirmala Sitharaman reveals intentions to further cut customs duties, targeting single-digit rates by 2027-28, as part of ongoing trade and tax reforms to boost manufacturing and growth.
India is likely to keep trimming customs duties over the next two years, with Union Finance Minister Nirmala Sitharaman saying the goal is to push most rates into single-digit territory by the Budget for 2027-28. Speaking at the National Council of Applied Economic Research’s India Policy Forum in New Delhi, Sitharaman said the government has already narrowed the field significantly and is continuing a wider effort to simplify trade taxes after earlier changes to corporate tax, income tax and the goods and services tax.
Business Standard reported that Sitharaman said, “Maybe by the Budget of 2027-28, I’d be able to say that, barring a few items, it (Customs duty) will come down to single digits… Even now, barring 13 items, we have rationalised the rate.” Official estimates cited in the report show the average customs duty rate has fallen to 10.66% from 11.65% as the number of tariff slabs has been cut to eight, including a zero-duty band.
The remarks come against the backdrop of a broader customs overhaul that has been gathering pace through Budget 2026-27. The Economic Times reported that the changes are intended to lower input costs for manufacturers and exporters, speed up customs clearances through a single digital window and make the system more predictable for investors. Separately, The Times of India reported that the government has been weighing a further reduction in tariff slabs to five or six, as part of a push to reduce disputes and align duty structures more closely with industrial policy and trade goals.
Sitharaman also linked duty reform to a wider argument about public finances and growth. According to Business Standard, she said borrowing has a role in economic expansion but must be channelled into asset creation and managed carefully by timing, size and purpose. She also urged states to borrow for productive spending and to strengthen revenues so debt can be brought down gradually. The International Monetary Fund has estimated India’s general government debt at 83.4% in 2026, underscoring the scale of the fiscal challenge even as New Delhi seeks to make the tax system simpler and more growth-friendly.
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