Also contributing is trade liberalisation being pursued under free trade agreements (FTAs), which will secure greater external market access for Indian businesses, according to Chaturvedi. “Any agreement with preferential market access will be lowering tariffs. That will of course have a revenue impact,” he said, adding that FTAs help Indian industry expand its global footprint.
The budget had projected a 5% growth in customs duty revenue collection in FY27 to ₹2.71 trillion, a moderation from the 11% growth estimated for FY26. Chaturvedi explained that customs duty exemptions have been granted on import of several capital goods in the budget for promoting domestic manufacturing and value addition.
Thirdly, early in 2025-26, customs duty rates on edible oils were kept high when there was a surge in edible oil imports. “We don’t expect that surge to be there in 2026-27. So, we pegged our forecast for 2026-27 to be a modest 5% growth,” he said.
The CBIC chairperson said the moderate growth projection was a conscious decision keeping in mind the steps being taken to build competitiveness of the domestic manufacturing industry, making it resilient and achieving sustained industrial growth to achieve the status of an advanced nation by 2047.
India has successfully concluded a spate of deals with trade partners, the latest being negotiations on an FTA with the EU and UK, and a trade deal with the US, details of which are awaited.
The chairperson also said the budget proposals seek to reform customs procedures significantly to cut the time and costs at ports for businesses, while also making life easier for individuals travelling abroad.
The government will offer a new scheme to manufacturers under which incentives like quicker clearance of shipments at ports, lower inspection rate, quicker tax refunds, facility for deferred duty payment and acceptance of self-declaration of origin of goods—similar to the benefits granted to trusted merchants under the authorised economic operators (AEO) scheme, will be granted.
The “eligible manufacturer importers” will receive AEO-equivalent benefits for two years to encourage their participation in the AEO programme.
The duty deferral period for AEOs, accredited merchants who are given certain privileges at ports, has also been extended from 15 days to 30 days.
The government has also called for bids from private players to build an integrated customs portal, which will act as a single window for all customs procedures, for better inter-agency coordination.
The goal is to provide a single touchpoint for all trade-related documentation and processes, significantly enhancing system agility, enabling the rollout of more services, and ultimately offering a seamless, facilitative experience supported by a robust IT backbone.
Only one application needs to be filed by businesses with the customs authorities, and all approvals will be secured internally by the government, Chaturvedi said. The proposed integrated IT system for all customs related processes will be developed in two years.
The chairperson also explained that significant process reforms have been introduced to ease trade. Also, the binding period for advance rulings has been extended from three to five years to give greater tax certainty to businesses.
Chaturvedi explained that the ₹10 lakh value cap for courier exports has been removed entirely, boosting market access for micro, small and medium enterprises (MSMEs) and enabling larger consignments to be sent via courier.
A new document-based system will streamline the handling of returns and rejects, minimizing physical intervention. Additionally, the Customs Act has been amended to permit “reverse logistics”, allowing uncleared goods to be re-exported, resolving a long-standing industry pain point.
Passenger facilitation measures being implemented include amendments to baggage rules, Chaturvedi explained.
For eligible residents and tourists returning after a year abroad, the value limit on duty-free jewellery has been removed, with allowances now solely based on weight (40 gm for ladies, 20 gm for men).
Passengers can now obtain a certificate for personal items like jewellery or cameras upon departure, resolving potential disputes upon re-entry. Transfer of Residence rules have been liberalized, increasing duty-free allowances for personal belongings for residents returning from abroad.
Chaturvedi explained that duty exemptions have been granted for capital goods in nuclear power projects, manufacturing of lithium-ion cells for energy storage, and raw materials for electric vehicles.