The Lok Sabha has passed the Finance Bill 2025, incorporating 35 government amendments aimed at tariff rationalisation and boosting domestic manufacturing. Finance Minister Nirmala Sitharaman highlighted key changes in customs duties and investment regulations during the discussion.
Customs Duty Rationalisation and Tariff Reforms
The government continues its commitment to rationalising customs duties as announced in the Union Budget 2025. The Finance Bill eliminates seven customs tariff rates to resolve duty inversion and reduce input costs for industries. Additionally, imports will now attract either a cess or a surcharge, but not both, ensuring a streamlined taxation process.
Boost for Domestic Manufacturing: Capital Goods Exemptions
To further support domestic production, the government has exempted customs duties on 35 additional capital goods used in electric vehicle (EV) battery manufacturing and 28 capital goods essential for mobile manufacturing. These exemptions aim to bolster India’s self-reliance in key technology sectors and promote domestic industry growth.
Simplified Safe Harbour Regime for Investment Funds
The Finance Bill 2025 also introduces amendments to the simplified safe harbour regime for investment funds. These changes provide greater clarity and ease of doing business, ensuring that India remains an attractive destination for global investors.
Aligning Trade and Investment Policies with Global Standards
Finance Minister Sitharaman underscored that these reforms align India’s trade and investment policies with international standards while maintaining a fair taxation structure. The measures are expected to enhance ease of doing business and encourage foreign and domestic investment in key sectors.
With these amendments, the Finance Bill 2025 takes a significant step towards fostering economic growth, reducing trade barriers, and promoting a competitive industrial environment in India.
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