Union Budget 2024-25: Major Revisions in Customs Duties on Cancer Medicines and Critical Minerals to Boost Domestic Manufacturing and Exports

New Delhi: Presenting the Union Budget 2024-25, Union Minister of Finance and Corporate Affairs  Nirmala Sitharaman emphasized the government’s commitment to supporting domestic manufacturing, enhancing local value addition, promoting export competitiveness, and simplifying taxation. The new Customs Duty rates are designed to cover a wide range of commodities, from life-saving medicines to rare earth minerals, while keeping the interest of the general public and consumers at the forefront.

Relief for Cancer Patients and Medical Equipment

In a significant relief for cancer patients, the budget proposes complete exemption from Customs Duties for three additional medicines: Trastuzumab Deruxtecan, Osimertinib, and Durvalumab. Additionally, the Basic Customs Duty (BCD) on x-ray tubes and flat panel detectors used in medical x-ray machines has been decreased to align with domestic capacity addition.

Mobile Phone Industry Boost

Highlighting the remarkable growth in the mobile phone industry, which has seen a three-fold increase in domestic production and nearly a hundred-fold increase in exports over the last six years, the Finance Minister proposed reducing the BCD on mobile phones, mobile PCBA, and mobile chargers to 15 percent. This move aims to benefit consumers directly.

Critical Minerals and Renewable Energy Sector

The budget also announces a full exemption of Customs Duties on 25 critical minerals and a reduction in BCD on two of them. These minerals are essential for sectors such as space, defense, telecommunications, high-tech electronics, nuclear energy, and renewable energy. Furthermore, the list of exempted capital goods for the manufacture of solar cells and panels has been expanded. However, due to sufficient domestic manufacturing capacity, the exemption of Customs Duties on solar glass and tinned copper interconnect will not be extended.

Seafood and Leather Exports

To enhance the competitiveness of seafood exports, the BCD on certain broodstock, polychaete worms, shrimp, and fish feed has been reduced to 5 percent. Additionally, various inputs for the manufacture of shrimp and fish feed are exempted from Customs Duty. Similar reductions and exemptions in Customs Duty are also announced for various leather raw materials to boost exports in the leather and textile sectors. The export duty structure on raw hides, skins, and leather is proposed to be simplified and rationalized.

Precious Metals and Industrial Inputs

The Customs Duties on gold and silver have been reduced from 15% to 6%, and on platinum from 15.4% to 6.4%, to enhance domestic value addition in gold and precious metal jewelry. Furthermore, the BCD on ferro nickel and blister copper has been removed to reduce the cost of production of steel and copper.

Comprehensive Review and Future Plans

The Finance Minister announced that a comprehensive review of the Customs Duty rate structure will be undertaken over the next six months. This review aims to rationalize and simplify the structure for ease of trade, eliminate duty inversion, and reduce disputes.