Customs Duty On Most Items To Fall To Single Digits By FY28: FM Sitharaman

New Delhi, Aug 7 (KNN) The government plans to continue rationalising tariff structures and aims to bring Customs duty on most items down to single-digit levels by the Budget for 2027–28 (FY28), Union Finance Minister Nirmala Sitharaman said on Thursday.

Speaking at the National Council of Applied Economic Research’s India Policy Forum in New Delhi, Sitharaman noted, “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,” Business Standard reported.

This move follows earlier reforms in corporate tax, income tax, and the Goods and Services Tax (GST), making Customs duty rationalisation the next key focus area for the government.

Progress So Far

The government has reduced the number of tariff slabs to eight, including a zero-duty category. Several rates have been eliminated over recent Budgets, contributing to a decline in the average Customs duty rate to 10.66 per cent from 11.65 per cent, according to official estimates.

Focus on Productive Borrowing

Addressing public debt, the finance minister emphasised the need for prudent borrowing aimed at asset creation. She said borrowing is necessary for economic growth, but must be carefully managed in terms of timing, scale, and purpose.

The Centre has significantly increased capital expenditure in the past five years, nearly tripling its spending to support economic growth and encourage private sector investment. 

“I would think it’s the public expenditure that we kept doing all these years with a lot of tough confidence that the Indian economy will benefit from it, has actually helped the private sector to come forward,” Sitharaman said, adding that, “They are now taking risks and putting money so that they can benefit from the growth India is seeing,” as quoted by Business Standard.

Advice to States on Debt Management

The minister also urged state governments to adopt a similar approach by prioritising borrowing for productive assets while ensuring debt remains sustainable. She stressed the importance of increasing revenues alongside borrowing to gradually reduce the overall debt burden.

Sitharaman added that some states have sought the Centre’s support in restructuring their debt to lower interest costs, and discussions are currently underway.

According to the International Monetary Fund (IMF), India’s general government debt stood at 83.4 per cent in 2026.

(KNN Bureau)