Finance minister Nirmala Sitharaman has set her sights on customs reform as the next major government push, signalling a significant move ahead of Budget 2026.
During the current financial year, the government pushed reforms such as rate rationalisation and simplification of income tax and GST to put more cash in the hands of the common man and boost consumption.
"We need a complete overhaul of customs... we need to have customs simplified for people to feel that it is not cumbersome to comply... need to make it more transparent," Sitharaman said at the HT Leadership Summit.
She stressed that the virtues of income tax, transparency and ease of compliance, must extend to customs. The reforms, she said, will be comprehensive and include customs duty rate rationalisation.
The announcements could be part of the upcoming Budget, likely to be presented on February 1.
"We have brought down customs duty over the last two years steadily. But in those few items where our rates are considered to be over the optimal level, we have to bring them down as well. Customs is my next big cleaning-up assignment," she said.
In this year’s Budget, the government eliminated seven additional customs tariff rates on industrial goods, following the removal of seven tariffs in 2023-24. This brought the total number of tariff slabs down to eight, including a zero rate.
Addressing concerns over the falling rupee, Sitharaman said it would find its natural level. The rupee has dropped about 5 per cent against the US dollar in 2025, hitting an all-time low of 90.21 on Wednesday amid foreign fund outflows and rising crude prices.
On economic growth, she remained confident. India’s GDP grew by 8.2 per cent, a six-quarter high, driven by factory output ahead of the GST rate cut, even as farm output slowed.
The services sector recorded double-digit growth in the second quarter, lifting GDP from 7.8 per cent in the previous three months and 5.6 per cent a year ago. For the first half ended in September, India’s growth stood at 8 per cent.