Simplification of customs will be next big reform, says FM Sitharaman

Ahead of Budget 2026, Finance Minister Nirmala Sitharaman on Saturday said the simplification of customs would be the next big reform agenda for the government.

During the current financial year, the government undertook reforms such as rate rationalisation and simplification of the income tax and Goods and Services Tax (GST) in a bid to boost consumption by providing more cash in the hands of the common man.

"We need a complete overhaul of customs... we need to have customs simplified for people to feel that it is not cumbersome to comply... need to make it more transparent," Sitharaman said while speaking at the HT Leadership Summit here.

There is a need to bring the virtues of income tax to the customs side in terms of transparency, she said, adding that the proposed reforms will be comprehensive and entail customs duty rate rationalisation.

The announcements to this effect can be made in the upcoming Budget, likely to be presented on February 1.

"We have brought down customs duty over the last two years steadily. But in those few items where our rates are considered to be over the optimal level, we have to bring them down as well. Customs is my next big cleaning-up assignment," she said.

In this year's Budget, among other measures announced, the government proposed eliminating seven additional customs tariff rates on industrial goods, following the removal of seven tariffs in 2023-24 (announced in the previous budget speech on July 23, 2024). This reduces the total number of tariff slabs to eight, including a zero rate.

On the depreciating rupee against the dollar, Sitharaman said, it will find its natural level.

The rupee has depreciated about 5 per cent against the US dollar during the calendar year 2025.

The rupee breached the 90-a-dollar level for the first time to settle at a fresh all-time low of 90.21 (provisional) on Wednesday, down 25 paise from its previous close, amid sustained foreign fund outflows and higher crude oil prices.

Sitharaman exuded confidence that the GDP growth would be 7 per cent or above during the current financial year.

The Indian economy grew by a higher-than-expected 8.2 per cent -- a six-quarter high -- as increased factory production in anticipation of a consumption boost from the GST rate cut helped offset deceleration in farm output.

The growth in the second quarter, compared with 7.8 per cent in the preceding three months and 5.6 per cent in the year-ago period, was aided by a strong showing from the services sector, which clocked double-digit growth.

For the first half ended in September, India clocked a growth rate of 8 per cent.