In a significant development for India’s taxation landscape, the central government is preparing a major revamp of the country’s customs framework. After implementing sweeping changes in the Goods and Services Tax (GST) regime, the government now aims to make customs processes simpler, faster and more transparent.
Speaking at the HT Leadership Summit, Finance Minister Nirmala Sitharaman said the customs system urgently needs modernization so that individuals and businesses no longer view it as complicated or burdensome.
The minister noted that the successful reforms introduced in the Income Tax department — including faceless assessments, improved transparency, and better administrative efficiency — should now be extended to customs operations as well. Leveraging technology to minimise human interface, reduce delays in goods clearance, and eliminate arbitrary decision-making will be central to the new strategy.
Sitharaman emphasised that the proposed reforms will be “comprehensive”, with customs duty rate rationalisation expected to be a key feature. The government has already undertaken significant tax reforms in the current financial year, including rationalisation of GST rates and simplification measures aimed at boosting consumption by increasing disposable income.
“We need a complete overhaul of customs… we need customs simplified so people feel it is not cumbersome to comply with. There is a need to bring the virtues of income tax to the customs side in terms of transparency,” the finance minister said.
Indications suggest that the first announcements related to these reforms could be made in the upcoming Union Budget, scheduled to be presented on February 1. The proposed overhaul is expected to further streamline India’s trade processes and support economic growth by fostering a more predictable and business-friendly environment.