Budget 2024: Customs Duty rejig To Promote Local Manufacturing

To promote domestic manufacturing and encourage the addition of value within the country, Budget 2024-25 has suggested decreasing or eliminating customs tariffs on various items such as gold & silver, mobile phones & chargers, medicines & medical equipment, essential minerals, and materials for the leather & textiles sectors. Exemptions have been removed or customs duties increased for industries like chemicals and telecom equipment to encourage local production.

“A comprehensive review of the customs duty rate structure will also be carried out over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction of disputes,” Finance Minister Nirmala Sitharaman said in her budget speech on Tuesday.

Gulzar Didwania, a Partner at Deloitte India, mentioned that the emphasis is also on lowering customs duty for finished goods in sectors with established domestic manufacturing to decrease conflicts with authorities.

The basic customs duty (BCD) for mobile phone, mobile PCBA, and mobile charger has been lowered to 15%, and the exemption from BCD has been prolonged, with conditions, for oxygen-free copper used in making resistors and connectors to enhance value addition in the electronics sector.

Anant Jain, Head of Customer Success - India, GfK said, “The reduction in the BCD on mobile phones, mobile PCDA (Printed Circuit Design Assembly), and mobile chargers is expected to make mobile devices and accessories more affordable, thereby boosting consumer demand and driving growth in the tech industry."