“This Budget has shown that there is a major step forward in terms of reforming India’s customs duty and the regime that governs it. We are building to be an investor-friendly country, and as a result, the duty cuts and the rationalisation that are being announced are part of a continuing process,” Sitharaman added
Mumbai: The government is working on building India as an investor-friendly country, and the rationalization of tariffs is part of this continuing process, said finance minister Nirmala Sitharaman on Monday at a post-Budget press conference in Mumbai.
“This Budget has shown that there is a major step forward in terms of reforming India’s customs duty and the regime that governs it. We are building to be an investor-friendly country, and as a result, the duty cuts and the rationalisation that are being announced are part of a continuing process,” Sitharaman added.
“For the last two years, India has taken several measures and is continuing to take measures, even in this Budget, for the rationalisation of customs duty and its application. Safeguard duties and anti-dumping duties that we levy are also being periodically reviewed, “ said the finance minister on the impact of US President Trump’s remarks on reciprocal tariffs.
On a question on the potential impact of imported inflation due to global tariff wars, Sitharaman said that the Reserve Bank of India (RBI) has managed inflation as per targets and February's repo rate cut shows that price rise is under control. "Inflation management and monetary policy are working in sync," she said.
Last week, Prime Minister Narendra Modi met US President Donald Trump, and both leaders agreed to begin negotiations and finalise a “mutually beneficial” bilateral trade agreement (BTA) within the next seven to eight months.
“We have done a lot of rationalisation. On industrial goods, out of 8,000 tariff lines, about 6,000 tariff lines are below 10 per cent. The first thirty of the most important US imports into India have a duty rate ranging from nil to 0.5 to 2.5 per cent, and so on. There would be only a very few items where there would be a higher duty. These things will be highlighted during negotiations on the bilateral trade agreement,” finance secretary Tuhin Kanta Pandey said.
On a question about the stock market volatility, Sitharaman said that the Indian market has currently delivered good returns to investors who are booking profits, which partly explains the outflows observed in the equity market by foreign institutional investors (FIIs).
“FIIs also go out when they are in a position to book profits. The Indian economy has an environment today wherein investments are yielding good results and profit booking is happening,” Sitharaman said.
On a question about the troubles in the co-operative banks sector and the recent instance of New India Co-operative Bank board being superseded by the RBI, Sitharaman said that it is the job of RBI to take action against errant banks, but said that in different states, different co-operative banks were working well, and it would not be right to take a decision on the entire sector based on one bank.
The finance minister also remarked that the income tax relief provided in the Union Budget along with the recent repo rate cut by the RBI would together boost consumption. The Union Budget for 2025-26 has raised the income tax exemption limit from Rs 7 lakh to Rs 12 lakh, providing significant relief to taxpayers. An estimated one crore middle-income Indian taxpayers will be out of the tax net.
Meanwhile at a post-budget interaction with stakeholders, Sitharam clarified that the massive income tax relief given in Budget 2025 doesn't mean that the government has shifted focus to consumption from capital expenditure.
