Reduce customs duty slabs in Budget 2026: GTRI - The Economic Times

The Global Trade Research Initiative (GTRI) has put forward a significant recommendation to the Indian government: to streamline and reduce the number of customs duty slabs in the upcoming Budget 2026. This proposal aims to simplify India's tariff structure, making it more aligned with global trade practices and potentially easing the compliance burden for businesses involved in international trade.

Currently, India operates with nine major customs duty slabs, which include rates of 0%, 2.5%, 5%, 7.5%, 10%, 12.5%, 15%, 20%, and 30%. GTRI's recommendation is to consolidate these into a more manageable six slabs: 0%, 2.5%, 5%, 10%, 15%, and 20%. Furthermore, the initiative suggests establishing a peak customs duty rate of 10% for non-agricultural products and a 20% peak rate for agricultural products. These proposed changes, if adopted, would come into effect with the Budget 2026, typically implemented around April 1, 2026, or as announced.

This proposed simplification is expected to benefit a wide range of stakeholders, particularly importers, customs brokers, and trade compliance officers. A reduced number of duty slabs would lead to greater predictability and transparency in India's trade policy, potentially lowering compliance costs and administrative complexities. For importers, this could mean a clearer understanding of their duty liabilities and, for some products, a reduction in the overall cost of imports. The rationale behind GTRI's recommendation also includes boosting domestic manufacturing and exports by reducing the cost of imported inputs, thereby facilitating India's deeper integration into global value chains.

Given these recommendations for Budget 2026, importers and trade compliance professionals should closely monitor developments in India's trade policy. While these are currently recommendations, they signal a potential shift towards a more simplified duty regime. Businesses should begin to assess how such changes might impact their specific product lines, supply chains, and overall import costs. Engaging with industry associations and staying informed through official government announcements will be crucial to prepare for any potential adjustments to customs duties in the coming years.