Customs Duty Cuts, Levy Withdrawals Ongoing, Unrelated to Global Events: FM

Finance Minister Nirmala Sitharaman stated that the current effort to streamline customs duties and eliminate the 6 percent equalization levy, initiated in 2023, is not affected by global happenings and will continue.

Nirmala Sitharaman noted that lowering customs duties aligns with India's larger goal to enhance its manufacturing base and support battery and advanced chemistry industries.

Replying to a debate on the Finance Bill 2025 in Rajya Sabha, Sitharaman said, "Consistently, budget after budget, we are coming up with a reduction in duties so that India's aspiration for being a manufacturing hub and India's aspiration in building capacities for battery manufacturing and advanced chemistry is being supported. So, this is a consistent thing."

"I heard quite a few members say, "Oh, the tariff war has started, so in response to the tariff announcements made by President Trump, here we are doing it. No, we have been doing it since 2023, steadily, every year. Newer items are being brought in, keeping in mind Atmanirbhar Bharat and, at the same time, Viksit Bharat's requirements, as well as simplifying the customs duty and compliance details," Sitharaman said.

The tariffs, scheduled to be implemented on April 2, will affect almost half of the vehicles sold in the United States, encompassing American brands manufactured abroad. The extensive initiative seeks to encourage automobile producers to set up additional manufacturing plants inside US territory.

Industry specialists caution that the tariffs may lead to extensive repercussions. Autos Drive America, a lobbying organization for international automakers in the US, voiced significant worries regarding the possible repercussions.

Economists forecast that the tariffs might raise vehicle prices by several thousand dollars, putting additional pressure on consumers who are already dealing with ongoing inflation. The action signifies a significant interference in the automotive sector, likely transforming worldwide vehicle production approaches