Editor’s Note
The government has signaled its next major reform push, with the Finance Minister announcing a comprehensive overhaul of customs procedures aimed at simplification and transparency, to be completed before the 2026 budget.
Finance Minister Nirmala Sitharaman has indicated that a comprehensive overhaul of customs procedures is set to take place before Budget 2026, signaling the government’s next major reform initiative.
Speaking at the HT Leadership Summit, Sitharaman emphasized the need to completely simplify customs procedures, stating that her goal is to bring the transparency seen in income tax to the customs side as well.
The primary goal is to make customs compliance easier and more transparent for individuals and businesses.
This reform initiative will be a major focus, following recent efforts to simplify income tax and the Goods and Services Tax (GST).
The Finance Minister described customs as her “next big cleaning-up exercise.”
The proposed reforms will include customs duty rate rationalization.
Sitharaman said that customs duties have been consistently reduced over the past two years, but rates still considered “above optimal levels” will be lowered.
In the current year’s budget, seven additional customs duty tariff rates on industrial goods were eliminated, bringing the total number of tariff slabs to eight, including a zero rate.
Addressing the falling rupee, Sitharaman expressed confidence that it will settle at its “natural level.”
The rupee has depreciated by nearly 5 percent against the US dollar in calendar year 2025, and recently crossed the 90-per-dollar level.
She also reiterated confidence in India’s GDP growth, estimating it to remain at 7 percent or higher for the current financial year.
The Indian economy recently recorded a strong growth of 8.2 percent in the previous quarter, the highest in six quarters.
This growth was bolstered by an increase in factory output and strong performance in the services sector, which recorded double-digit growth.
For the first half of the financial year, India’s economy grew by 8 percent.
Simplifying customs procedures could significantly reduce the cost of doing business, making imports and exports more efficient.
This could boost international trade, encourage foreign investment, and improve India’s ease of doing business ranking.
Businesses heavily reliant on imports or exports could see better margins and operational efficiency.
Reforms could also benefit consumers by potentially lowering the cost of imported goods.
Overall, this signals a continued focus on structural reforms to enhance economic competitiveness.