Customs Duty

Customs duty is a tax levied by the Indian government on goods imported into or, in some cases, exported from India — administered by the Central Board of Indirect Taxes and Customs (CBIC) under the Customs Act, 1962. Import customs duties serve multiple policy objectives: generating government revenue, protecting domestic industries from foreign competition, and regulating the flow of specific goods for strategic or security reasons. India's customs duty structure includes Basic Customs Duty (BCD), Social Welfare Surcharge (SWS), and in certain cases, additional duties like Anti-Dumping Duty (ADD) and Countervailing Duty (CVD) on subsidised imports. For Indian equity investors, customs duty changes announced in the Union Budget have direct sector-level implications — duty reductions on raw materials benefit downstream manufacturers (e.g., lower steel import duty benefits auto companies), while duty hikes on finished goods protect domestic producers (e.g., higher duty on imported electronics benefits Indian electronics manufacturers). The government's Make in India and PLI scheme objectives have led to significant customs duty rationalisation in recent years.