India targets single-digit customs tariffs by FY28 Budget

What to watch

• FY28 Budget tariff schedule: number of slabs eliminated, changes to peak rates and effective dates.
• HS-code-level duty changes for consumer electronics, apparel, beauty, food, toys, homeware and imported private-label products.
• Differential treatment of finished goods versus inputs, components, machinery and packaging materials.
• Expansion or relaxation of Quality Control Orders, BIS certification, import licensing and country-of-origin requirements.
• Changes in free-trade-agreement utilization rules and tariff concessions for key sourcing markets.
• Rupee movement, freight rates and global commodity costs, which could absorb or amplify customs-duty savings.
• Domestic manufacturer lobbying and sector-specific safeguard, anti-dumping or countervailing-duty actions.
• Map exposure by HS code to distinguish finished-goods duties from duties on components, packaging and raw materials.
• Rebid supplier contracts with tariff-pass-through clauses and model landed-cost savings under phased reductions rather than assuming immediate price cuts.
• Evaluate local assembly or contract-manufacturing economics for high-volume imported categories, especially where component tariffs may fall faster than finished-product duties.
• Build FY27-FY28 assortment plans around categories likely to receive lower duties, while preserving domestic-source alternatives for politically sensitive goods.
• Use prospective cost relief to fund selective price investment, margin recovery or wider premium assortment rather than applying across-the-board price cuts.
• Increase customs and product-compliance capability because tariff simplification may be accompanied by stricter standards, origin documentation and quality-control enforcement.