'Customs reforms will make industry more resilient': CBIC Chairman Vivek Chaturvedi

New Delhi: The Union Budget 2026-27 has introduced a series of reforms in customs processes and rationalised rates. It comes amid the announcement of free trade deals with multiple countries. Central Board of Indirect Taxes and Customs (CBIC) Chairman Vivek Chaturvedi, a 1990-batch officer of the Indian Revenue Service (Customs & Indirect Taxes), has wide experience in various aspects of indirect taxation, especially policy formulation. In a post-Budget interaction with DH’s Gyanendra Keshri, Chaturvedi says the customs reforms would help improve competitiveness of Indian industry. He also underlines the reforms targeted at making common people’s travel easier. Edited excerpts:

What is the rationale behind the customs duty changes? How will they impact industries?

The customs duty changes have been done in a calibrated approach. We’ve looked at specific needs and sectors in criticality. For example, we’ve provided an exemption for setting up nuclear power plants without any capacity limits. We have provided exemption to capital goods for the manufacture of lithium-ion cells used for battery energy storage systems. Exemption will be given on import of sodium antimonite, which is used for the manufacture of solar glass. There is a lot for MSMEs. I will give you a small example of an umbrella. MSMEs manufacture umbrellas in the country. There are issues of cheap imports. So we have decided to raise the import duty on umbrellas to Rs 60 per piece or 20% of value, whichever is higher. We’ve provided customs duty exemptions for inputs that go into the manufacture of shoe upper. On the personal side, we’ve provided customs duty exemption to 17 drugs for anti-cancer treatment. We have also expanded the list of rare diseases by adding seven more. On the defence side, we’ve given an exemption to raw materials for the manufacture of parts to go into the maintenance and repair of defence aircraft. All these measures are designed for protection, as well as making the industry resilient and more competitive in the market.

Have the customs reforms been guided by the free trade agreements?

Trade deals are double-sided. While we get market access, we also open the market for foreign competition. Free trade agreements basically mean that finished products would come into the Indian market at preferential rates. They will be sold in our market, where the domestic industry is also competing. Our aim is to provide support to the domestic industry, so that it becomes resilient and competitive.

What is the change in import duty on goods imported for personal use?

The tariff rate on all dutiable goods imported for personal use has been reduced to 10%. This will bring more clarity. Personal imports were already at 10%. Earlier, the problem was that gifts attracted a higher rate of 20%. So we have decided to make it simpler. Now, all personal imports, including gifts, will attract 10%. In addition, there will be 1% social welfare surcharge and also there is 18% IGST (Integrated Goods and Services Tax). The effective rate comes to 30.98%.

What are the changes in baggage rules?

There is a significant increase in the limit for duty-free import by passengers. Baggage Rules, 2026, has been notified. It has changed after 10 years. Now, resident Indians and people of Indian origin can bring goods worth up to Rs 75,000, without paying any duty. Earlier, this limit was Rs 50,000. For tourists of foreign origin, this limit has been increased from Rs 15,000 to Rs 25,000. There is also a significant change in the import of jewellery. Indian nationals, having stayed for a minimum of one year abroad, are allowed to bring jewellery weighing up to 40 grams (women) and 20 grams (others). Earlier, in addition to the weight limit, there was also a value limit. The value was a matter of interpretation and used to cause inconvenience. Now, we have decided to do away with the value limit.

Do gold and silver bullion also fall under the Rs 75,000 limit?

Jewellery is included, but not bullion. Gold and silver bars aren’t allowed to be imported by individual travellers. However, Indian nationals staying abroad for more than six months can bring up to 1 kg gold and up to 10 kg silver, subject to payment of duty. 5% basic customs duty is charged.  

How will the changes in customs rates impact the government’s revenue?

Customs reforms are not a revenue measure. It’s not a rate rationalisation. It’s a measure designed to look at specific needs of the economy and also ease of travel and ease of living. Of course, whenever exemptions happen, it would lead to more imports. We hope that the industry will use those inputs to become more competitive. It will be good for the economy. In FY2026-27, the customs revenue is estimated to grow 5% over the revised estimate of 2025-26.

What kind of growth is expected in GST revenue collection?

We are expecting 3.5% growth in the first half of FY27. In the second half, it is estimated at 9.4%. So the average growth in GST revenue in FY27 is estimated at 6.3%. This is healthy growth, given the kind of rate cuts and rationalisation.