Budget 2025: Tariff Cuts, Rate Rationalisation To Help Address 'Bad Optics', Says CBIC Chairperson
India is moving towards the average custom rates when compared with other Asean countries, Sanjay Agarwal says.
The rate rationalisation and tariff cuts in Budget 2025 will help address India's "bad optics" as a high-tariff nation, according to Central Board of Indirect Taxes and Customs Chairperson Sanjay Kumar Agarwal.
The review exercise carried out involved 12,500 tariff lines, Agarwal said at an event of the Federation of Indian Chambers of Commerce & Industry on Monday. "Out of those, 8,500 pertain to industrial goods. Now, most products — about 6,500 — fall in five slabs within the 0–10% band, such as 0%, 2.5%, 5%, 7.5% and 10%," he said.
"India has always had very few items in the high rate band. Even in the 15–20% band, most items were covered under PLI and manufacturing schemes. We didn't carry out the exercise on agriculture and textile goods since they are sensitive areas," Agarwal said.
The recent rationalisation will help in the perception of India's trade policies. "By carrying out this exercise, we could address the bad optics," Agrawal said.
He added that the exercise was carried out keeping in mind that there should not be any major shock to industry. "Our average custom rate is now at 10.66% from 11.65%, we're moving towards the average rates when compared with other Asean countries," he said.
Within just a couple of weeks as US president, Donald Trump has taken a stance against its trading partners, calling China, India and Brazil as "tremendous tariff-makers". He imposed 25% tariffs on Canada and Mexico, with an additional 10% on China as part of his 'America First Trade Policy'.
