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Deloitte India has called for changes in customs duties and targeted reforms in Special Economic Zones to strengthen domestic manufacturing and improve export competitiveness. It has suggested lowering duties on components, raising them on finished goods, and expanding the Phased Manufacturing Programme beyond electronics. The firm also highlighted the need for higher allocations for research, technology upgrades, and export promotion schemes such as the Market Access Initiative. These measures, it said, could support value addition, reduce litigation, and help address India's widening merchandise trade deficit.
Deloitte India has suggested that rationalising the import duty structure and raising budgetary allocations could support domestic manufacturing and strengthen India's export performance. The firm said these measures, if taken in the forthcoming Union Budget, could help improve competitiveness across key sectors and reduce trade-related disputes. Advertisement
It also pointed to the need for reforms in the Special Economic Zone framework. According to Deloitte, allowing domestic supplies on a duty-forgone basis, easing sub-contracting norms, and exempting value addition from customs duty could make SEZs more competitive. The firm added that a limited customs amnesty scheme could further help in lowering litigation and easing compliance.
The Union Budget for 2026-27 is scheduled to be presented on February 1. Deloitte noted that the Budget should build on the government's ongoing push to strengthen domestic manufacturing as a route to achieving sustained export growth.
The consulting firm said a key step would be further rationalisation of customs duties. It recommended lowering duties on parts and components in sectors where India has already achieved optimal manufacturing capacity, while increasing duties on finished goods. This, it said, would discourage imports of finished products, encourage domestic value addition, and create a stronger base for exports.
Deloitte also suggested expanding the Phased Manufacturing Programme to additional priority sectors. The programme has earlier shown positive outcomes in areas such as mobile phones and electronics. Extending this framework, along with higher budgetary support for research, development, and technology upgrades, could help India move up the value chain and export more fully finished products.
In addition, the firm said higher allocations and continuation of the Market Access Initiative scheme would strengthen export promotion bodies and help Indian exporters increase their presence in global markets.
India's merchandise exports during April to November of the current financial year rose 2.62 per cent to USD 292.07 billion, while imports increased 5.59 per cent to USD 515.21 billion. This resulted in a trade deficit of USD 223.14 billion.
Source PTI
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