Customs duty rates have been gradually reduced over the past two years, but certain items still remain above optimal levels and will require downward revision. “Customs is my next big cleaning-up assignment Nirmala Sitharaman, Finance Minister 

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Finance Minister Nirmala Sitharaman on Saturday said the government will prioritise a complete overhaul and simplification of customs procedures as its next major reform push ahead of Budget 2026. Speaking at the HT Leadership Summit, she said customs processes must become easier, more transparent and aligned with the efficiency seen in income tax systems. The comprehensive reform is expected to include customs duty rate rationalisation, with key announcements likely in the upcoming Union Budget on February 1.

Sitharaman noted that during the current financial year, the government carried out several reforms including rate rationalisation and simplification of income tax and GST to boost consumption and leave more disposable income with citizens. Now, the focus will shift to modernising customs to reduce compliance burdens.

The minister said customs duty rates have been gradually reduced over the past two years, but certain items still remain above optimal levels and will require downward revision. “Customs is my next big cleaning-up assignment,” she remarked.

In the latest Budget, the government proposed eliminating seven additional customs tariff rates on industrial goods, following a similar reduction in the previous fiscal. With this move, the number of tariff slabs now stands at eight, including a zero-duty rate.

Commenting on the rupee’s depreciation, Sitharaman said the currency will eventually stabilise at its natural market-determined level. The rupee has weakened around 5 per cent against the US dollar so far in 2025, breaching the 90-per-dollar mark this week to hit a record low of 90.21 amid foreign fund outflows and higher crude oil prices.

On the broader economy, she expressed confidence that GDP growth will remain at 7 per cent or higher this fiscal. India’s economy expanded by 8.2 per cent in the first half of the year, supported by strong manufacturing and double-digit growth in services, even as agriculture slowed.