Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2025-26, introduced a series of adjustments to basic customs duties (BCD) aimed at supporting domestic manufacturing, boosting exports, and easing costs for critical goods. The changes are expected to influence the prices of various products, with some becoming cheaper while others see price hikes.
Relief for Patients
To provide relief for patients with cancer, rare diseases, and other severe chronic conditions, the government has fully exempted 36 lifesaving drugs from BCD. Additionally, six medicines will now attract a concessional duty of 5 percent. The exemptions extend to drugs supplied free of cost under patient assistance programs.
Support for Domestic Manufacturing
In a bid to strengthen domestic production, Sitharaman announced a full exemption on cobalt powder, lithium-ion battery scrap, and 12 other critical minerals. The move is expected to secure raw material availability and generate employment.
Boost for the Textile Industry
The budget proposes a full exemption for two types of shuttle-less looms to promote the domestic production of technical textiles. BCD on knitted fabrics has been revised to “20 percent or Rs 115 per kg, whichever is higher.”
Electronic Goods and Batteries
Sitharaman announced a hike in BCD on Interactive Flat Panel Displays (IFPDs) from 10 percent to 20 percent, while the duty on Open Cell components was reduced to 5 percent. The exemptions will support the manufacturing of lithium-ion batteries for both electric vehicles and mobile phones.
Maritime and Telecommunication Sectors
The BCD exemption on shipbuilding materials was extended for ten more years to support long-term growth. Additionally, the duty on Carrier Grade ethernet switches was reduced from 20 percent to 10 percent, bringing it in line with Non-Carrier Grade switches.
Export Promotions
To facilitate the export of handicrafts, the allowable period was extended to one year, with an additional three-month extension if required. BCD exemptions were proposed for Wet Blue leather and crust leather to support domestic processing and exports by small tanners.
Marine Products and Railway Goods
To enhance India’s seafood competitiveness, the BCD on Frozen Fish Paste (Surimi) and fish hydrolysate was reduced from 30 percent and 15 percent respectively to 5 percent. The maintenance, repair, and overhaul (MRO) timeline for railway goods was extended to one year, aligning with previous provisions for aircraft and ships.
(Inputs from ANI)