Union Budget 2025: What's cheaper and what's costlier now
What's the story
The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, has made some major changes to the customs duty structure. These changes are likely to affect several sectors, including healthcare, manufacturing, and technology. The budget proposes exemptions and cuts in Basic Customs Duty (BCD) on a number of essential products, especially in the healthcare and manufacturing sectors.
Healthcare relief
Budget 2025: Exemptions for life-saving drugs and medicines
The Union Budget 2025 has proposed to exempt 36 cancer treatment and rare disease drugs from Basic Customs Duty (BCD). The move is expected to ease the financial burden on patients and improve access to life-saving medicines. Another 37 medicines will also be exempted from BCD, providing further relief to the healthcare sector.
Manufacturing boost
Budget 2025: Support for manufacturing sector
The government has further proposed to fully exempt cobalt products, LEDs, zinc, lithium-ion battery scrap, and 12 other critical minerals from basic customs duty. This will reduce the cost of raw materials required for manufacturing industries such as electronics and battery production. Raw materials for manufacturing ships will be exempted from BCD for the next 10 years, boosting the maritime sector and the 'Make in India' initiative.
Industry support
Budget 2025: Promotion of handicraft exports and leather industry
To further boost the export of handicrafts, the government announced a scheme to promote these exports, making handicrafts more competitive in the global market. Wet blue leather will be fully exempted from basic customs duty, helping the leather industry by reducing input costs for manufacturers. The customs duty on fish pasteurii will be reduced from 30% to 5%, benefiting the food and agriculture sectors.
Tech impact
Budget 2025: Increase in customs duty on tech products
On the flip side, some goods are slated to get costlier due to changes in customs duties. The government has proposed raising the basic customs duty on interactive flat-panel displays from 10% to 20%. This move is aimed at correcting the inverted duty structure and leveling the playing field for domestic manufacturers of such products. The government has also introduced a two-year time limit for provisional assessments, ensuring quicker and more efficient customs clearance for businesses.
Tariff revisions
Budget 2025: Other changes in tariff structure
Further, the budget also proposed the removal of seven tariff rates, in addition to the seven rates removed in the 2023-24 budget. This rationalization is part of an ongoing effort to streamline the customs tariff structure and make trade more efficient. The Social Welfare Surcharge will be exempted on 82 tariff lines that are subject to a cess, reducing the overall tax burden on businesses and industries that deal with these goods.