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India Cuts Import Duty, Boosts Exports in Response to US Tariffs

Finance Minister Nirmala Sitharaman announced key customs duty reductions and exemptions in the Union Budget, directly responding to recent US tariffs. The measures include cutting the duty on goods imported for personal use and providing duty exemptions for manufacturing lithium-ion cells and battery energy storage systems. Significant support was announced for the seafood export industry by increasing duty-free import limits for processing inputs. The budget also aims to boost the defence sector and establish rare earth corridors in mineral-rich states.

Key Points: India's Budget Duty Cuts Counter US Tariffs, Boost Exports

  • Duty cut on personal imports from 20% to 10%
  • Duty exemption for lithium-ion cell manufacturing
  • Boost for seafood export industry
  • Support for defence sector MRO
  • Aid for mineral-rich states
3 min read

Counter to US tariffs: Centre reduces tariff rate on goods imported for personal use, exempts customs duty on manufacturing lithium-ion cells for batteries

FM Nirmala Sitharaman announces customs duty cuts on personal imports, lithium-ion cell manufacturing, and aid for seafood exports in Union Budget.

"I propose to increase the limit for duty-free imports of specified inputs used for processing sea foods for export - Nirmala Sitharaman"

New Delhi, February 1

In response to the US tariffs, Union Finance Minister Nirmala Sitharaman on Sunday proposed reducing the tariff rate on all dutiable goods imported for personal use from 20 per cent to 10 per cent.

In line with the government's aim to promote exports and lift the seafood industry hit by US tariffs, FM Sitharaman propose to increase the limit for duty-free imports of specified inputs used for processing seafood for export from the current one per cent to three per cent of the FOB value of the previous year's export turnover.

Union FM Nirmala Sitharaman said, "I propose to increase the limit for duty-free imports of specified inputs used for processing sea foods for export from the current one per cent to three per cent of the FOB value of the previous year's export turnover. I also propose to allow duty-free imports of specified inputs, which is currently available for exports of leather or synthetic footwear to exports of shoe uppers as well."

In a boost to the defence sector, FM Sitharaman announced, "It is proposed to exempt basic customs duty on raw materials imported for the manufacture of parts of aircraft to be used in maintenance, repair or overhaul requirements by units in the defence sector."

The Finance Minister proposed a basic customs duty exemption to capital goods used for manufacturing lithium-ion cells for batteries and critical minerals.

Union FM Nirmala Sitharaman said, "I propose to extend the basic customs duty exemption on import of goods required for nuclear power projects till 2035 and expand it for all nuclear plants irrespective of their capacity."

"I propose to extend the basic customs duty exemption given to capital goods used for manufacturing lithium-ion cells for batteries to those used for manufacturing lithium-ion cells for battery energy storage systems also. I propose to exempt the basic customs duty on the import of sodium antimonate for use in the manufacturing of solar glass. It is proposed to provide basic customs duty exemption to the import of capital goods required for the processing of critical minerals in India," the Finance Minister added.

The customs duty exemptions and aid to export comes after the United States President Donald Trump imposed 50 per cent tariffs on imports of Indian goods, affecting the Indian textile, seafood and other exports.

Finance Minister Nirmala Sitharaman has also proposed to support mineral-rich states such as Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to establish dedicated rare earth corridors.

FM Sitharaman presented the Union Budget for the record ninth time.

- ANI

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Reader Comments

P
Priya S
Glad to see support for the seafood industry. Many livelihoods in coastal states depend on it. Increasing the duty-free import limit for inputs from 1% to 3% will help our exporters stay competitive against US tariffs. Good step.
R
Rohit P
Exempting customs duty on lithium-ion cell manufacturing is a game-changer for our battery and EV industry. We need to reduce dependence on Chinese imports. Hope this translates to cheaper electric vehicles and storage solutions soon!
S
Sarah B
While the strategic moves for industry are commendable, I hope the reduction in personal import duty from 20% to 10% is passed on to consumers. Often, these benefits get absorbed by sellers and we see no price difference.
V
Vikram M
The focus on rare earth corridors in states like Odisha and Kerala is crucial. We have the minerals, we need the processing technology. This budget seems to be laying the groundwork for that. Jai Hind!
M
Michael C
Interesting to see India's calibrated response to US tariffs. Supporting specific export sectors while boosting domestic manufacturing in future-tech areas like batteries and defence. A pragmatic approach to a complex trade situation.

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