"No new custom duties to help imports...India trying to integrate in global supply chains": US-based expert on interim budget

Mumbai (Maharashtra) [India], February 1 : India is trying to integrate itself into global supply chains and Finance Minister Nirmala Sitharaman not announcing a change in customs duties "is very warmly welcomed", said an expert who has been working on US-India relations for over 25 years.

Speaking on the interim budget 2024-25 presented by Nirmala Sitharaman in Parliament on Thursday, Richard Rossow, Director of the chair in US-India Policy Studies at Centre for Strategic & International Studies (CSIS), said it was interim budget and bigger announcements can be expected during the full budget after the Lok Sabha polls.

"Considering that this is more of a continuing resolution - a vote on account - you are never expecting too much from these. Expecting that bigger announcements will happen by whoever wins the elections. But overall, there were a couple of modest surprises...As somebody representing a foreign organisation, we are looking to see what she says on things on things like trade and investment," Rossow said.

"She was touting all the massive inflows of FDI. 25 years ago, foreign investment wasn't always a good thing. But, also on trade, India is trying to integrate itself in global supply chains and the fact the she announced no new customs duties to try to help imports come in...is very warmly welcomed as well," he added.

CSIS is a US-based non-profit policy research organization and think tank analyzing global issues.

In her speech, Sitharaman mentioned steps taken in customs to facilitate international trade.

She said the import release time declined by 47 per cent to 71 hours at Inland Container Depots, by 28 per cent to 44 hours at air cargo complexes and by 27 per cent to 85 hours at sea ports, over the last four years since 2019.

She also did not propose any changes relating to taxation and retained the same tax rates for direct taxes and indirect taxes including import duties.

To ensure continuity in taxation, the Union Finance Minister proposed to extend certain tax benefits to start-ups and investments made by sovereign wealth or pension funds and tax exemption on certain income of some IFSC units till March 31, 2025.

In line with the Government's vision to improve ease of living and ease of doing business, and to provide relief to a large number of petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962, Sitharaman proposed to withdraw such outstanding direct tax demands up to Rs 25,000 pertaining to the period up to financial year 2009-10 and up to Rs 10,000 for financial years 2010-11 to 2014-15.

This is expected to benefit about one crore tax-payers.