Deloitte Sees Import Duty Rationalization Boosting Exports

Deloitte India on Tuesday said rationalizing the import duty structure and increasing budgetary allocations in the forthcoming Union Budget would help strengthen domestic manufacturing and boost the country’s exports.

The consulting firm noted that focused fiscal and policy reforms could improve export competitiveness while reducing dependence on imported finished goods.

Deloitte also called for reforms to the Special Economic Zone (SEZ) regime to enhance efficiency and reduce litigation. Key recommendations included allowing domestic supply on a duty-forgone basis, easing sub-contracting norms, exempting value addition from customs duty, and introducing a limited customs amnesty scheme to resolve disputes.

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The Union Budget for 2026–27 is scheduled to be presented on February 1, and Deloitte said it should build on the government’s ongoing initiatives aimed at strengthening manufacturing ecosystems and promoting sustainable export growth.

Gulzar Didwania, Partner at Deloitte India, said a critical step would be further rationalization of the customs duty structure. He suggested lowering duties on parts and components in sectors where India has achieved optimal manufacturing capacity, while raising duties on finished goods. This approach, he said, would discourage imports of finished products, encourage domestic value addition, and create a stronger base for exports.

Deloitte also recommended expanding the scope of the Phased Manufacturing Programme (PMP), which has shown positive results in sectors such as mobile phones and electronics. Extending the PMP framework to other priority manufacturing sectors, along with higher budgetary support for research and development and technology upgradation, would help India move up the value chain and export fully finished products.

In addition, the firm suggested enhanced budgetary allocation and extension of the Market Access Initiative (MAI) scheme to strengthen export promotion bodies and support Indian exporters in expanding their presence in global markets.