The big Budget push to ramp up domestic manufacturing and improve export competitiveness
The Economic Survey 2020-21 and the Union Budget 2021-22 are remarkably different from previous ones. While the survey provides the analytical backstop for the government’s intent to borrow, build and grow, the budget itself is directionally clear and unambiguous about broad strategy. To build and support local industry — the AatmaNirbhar Bharat (ANB) programme — it is recalibrating the entire range of tariffs on imports and exports.
“Our customs duty policy should have the twin objectives of promoting domestic manufacturing and helping India get onto global value chain and export better,” Finance Minister Nirmala Sitharaman said in her budget speech. “The thrust now has to be on easy access to raw materials and exports of value-added products.”
Sitharaman said the government was overhauling the entire structure; it had already eliminated 80 outdated exemptions and was reviewing another 400. On October 1, 2021, a new customs duty regime “free of distortions” will be put in place.