Rs 4 Lakh Cr To Be Foregone on BCD Cuts, Concessions Under Trade Deals
The trade deal with Japan accounts for Rs 11,365 crore and South Korea Rs 10,872 crore.
Chennai: The revenue foregone due to basic customs duty cuts and tariff concessions under preferential and free trade agreements is expected to be Rs 4 lakh crore in FY26. Of this, duty exemptions offered for imports coming under trade agreements account for Rs 1 lakh crore.
The foregone revenues are estimated to go up from Rs 3.93 lakh crore in FY25 to Rs 4.05 lakh crore in FY26. Of this, unconditional and technical BCD exemptions account for Rs 2.56 lakh crore, up from Rs 2.44 lakh crore in FY25.
The share of foregone revenues on account of conditional BCD exemptions came down to Rs 47,714 crore in FY26 from Rs 49,557 crore in FY25, as per the Budget documents. In this category, import of goods used in the production of mobile phones led to foregone revenues going up from Rs 4,960 crore in FY25 to Rs 6,056 crore in FY26.
Further, the revenue foregone on tariff exemptions under free trade agreements, preferential trade agreements and comprehensive economic partnership agreements will account for Rs 1,01 lakh crore against Rs 98,569 crore in FY25.
The concessional rate of customs duty for specified goods imported from ASEAN under the trade agreement, will account to foregone revenues of Rs 40,833 crore. The trade deal with Japan accounts for Rs 11,365 crore and South Korea Rs 10,872 crore.
A significant drop in the foregone revenues is estimated from the imports from Least Developed Countries from Rs 7,017 crore in FY25 to Rs 5,367 crore in FY26.
However, imports from Bangladesh, Bhutan, Maldives, Nepal and Afghanistan have led to a rise in foregone revenues from Rs 9,516 crore to Rs 10,563 crore. Australian imports also have seen a rise from Rs 4,879 crore to Rs 5,106 crore and the foregone revenues from UAE imports saw the highest rise from Rs 6,231 crore to Rs 9,267 crore. Malaysian imports also have seen a rise to Rs 1,519 crore.
The revenue impact on account of export promotion schemes is expected to drop from Rs 86,563 crore in FY25 to Rs 78,053 crore in FY26. Of this, the impact of promotion schemes for SEZ dropped from Rs 46,689 crore in FY25 to Rs 38,354 crore in FY26.
