Free trade agreement tariff concessions cost India Rs 94,172 crore in FY25

Customs revenue set to face greater strain as country pursues more trade pacts

With India negotiating trade deals with developed economies like the United States (US), European Union (EU), and United Kingdom (UK), its customs duty collection, budgeted to grow only 2.1 per cent to ₹2.4 trillion in FY26, may come under more pressure than it is now.

 

India had forgone ₹94,172 crore as customs duty in FY25 due to preferential tariff reductions under free-trade agreements (FTAs) signed with entities such as Japan, South Korea, and the Association of Southeast Asian Nations (Asean).

 

While India and the US have agreed to begin negotiations on a “first tranche of a mutually beneficial, multi-sector” bilateral