Key Highlights
- Life‑saving drugs for cancer and chronic ailments are now fully exempted from basic customs duty.
- Electronic components for open‑cell batteries see their BCD cut to 5%.
- Critical minerals such as cobalt powder, lithium‑ion battery waste, lead and zinc enjoy duty‑free status.
- EV‑related battery inputs and specific textile machinery are removed from the duty‑paying list.
- Interactive flat‑panel displays and certain knitted fabrics face a higher customs levy.
Detailed Insights
The 2025 Union Budget, announced by Finance Minister Nirmala Sitharaman, reshapes India's import tariff landscape. A principal objective is to lower the landed cost of essential medicines, strategic minerals and green‑technology inputs, thereby supporting public health and the nation’s clean‑energy transition. Consequently, 36 oncology and chronic‑disease drugs have been granted a total exemption from the basic customs duty (BCD), eliminating a cost layer that previously inflated retail prices.
In the electronics arena, the government trimmed the BCD on open‑cell lithium‑ion battery components to 5%, aiming to stimulate domestic production of electric‑vehicle (EV) batteries and mobile‑phone power packs. Parallelly, the budget lists 35 ancillary items for EV‑battery assembly and 28 for mobile‑phone battery assembly as duty‑free, encouraging a value‑chain shift toward indigenous manufacturing.
Mineral imports that are indispensable for renewable‑energy equipment—cobalt powder, spent lithium‑ion cells, lead, zinc and twelve additional critical minerals—are now exempt from BCD, reducing input costs for sectors ranging from battery fabrication to alloy production. The leather industry also benefits: wet‑blue leather, a semi‑finished hide used in footwear and apparel, is fully freed from duty.
Conversely, certain high‑tech visual equipment confronts a steeper tariff. Interactive flat‑panel displays, previously taxed at 10%, now attract a 20% duty, reflecting a policy shift to protect domestic display manufacturers. Knitted fabrics, a staple of the apparel sector, experience a duty hike, adding pressure on import‑dependent manufacturers.
Administrative reforms accompany these fiscal changes. A two‑year window for provisional assessment streamlines customs clearance, while the removal of seven tariff brackets simplifies the overall tariff schedule. Additionally, the social welfare surcharge has been withdrawn for 82 tariff lines, easing the ancillary tax burden on select imports.