Finance Ministry Focuses on Targeted Reforms Rather Than Broad Custom Duty Reductions for Budget FY28

The Finance Ministry is preparing for Budget FY28 by shifting its strategy away from sweeping customs duty reductions, focusing instead on comprehensive ease of trade measures. Officials plan to implement targeted corrections to resolve inverted duty structures where raw materials face higher duties than finished goods. Additionally, the strategy involves accelerating procedural reforms, offering Authorised Economic Operator (AEO) relaxations, and expanding the operational scope of Customs Project 2.0.

Trade policy historically relied on broad-brush tariff cuts to stimulate manufacturing and import-export activity, which often created sector-specific distortions. The shifting approach targets specific supply chain bottlenecks and administrative friction points rather than altering baseline headline duty rates. Under the upcoming framework, compliant traders benefit from expedited clearance processes and modernized digital platforms. Import-export businesses and trade consultants should review their supply chain duty profiles to identify exposure to inverted duty structures ahead of the budget.

Companies should evaluate eligibility for AEO certification to leverage upcoming procedural flexibilities. Bottom line: tracking these targeted administrative updates helps businesses optimize duty outlays and streamline customs compliance.