New Delhi, Jan 22 (PTI) Exporters on Thursday sought a series of measures, including tax incentives, rationalisation of import duties, and support for branding and marketing initiatives in global markets,
in the forthcoming Budget to boost shipments.
They suggested that the Budget should urgently address the problem of inverted customs duty structures, where import duties on raw materials, components, or intermediates are higher than those on finished goods.
Finance Minister Nirmala Sitharaman will present the Budget for 2026-27 on February 1.
The exporting community has also sought targeted policy and fiscal support for the development of global-scale shipping lines in the country, access to long-term finance, and viability gap funding.
The Federation of Indian Export Organisations (FIEO) has recommended rationalisation of import duties on key inputs used by export-oriented industries so that input costs are aligned with finished product duties.
For instance, it said, synthetic yarns and fibres attract higher customs duties than finished fabrics and garments, which adversely impacts the textile and apparel value chain.
Similarly, electronic components, such as printed circuit boards, connectors, and sub-assemblies, face higher duties compared to imported finished electronic products, discouraging domestic value addition.
In the chemical and plastics sector, basic raw chemicals and polymers often attract higher duties than downstream finished products, undermining Indian manufacturers.
The leather and footwear sector also faces higher duties on inputs like components and accessories vis-a-vis imported finished footwear, the apex exporters' body said.
"Correcting these anomalies by lowering or restructuring duties on raw materials will reduce production costs, ease working capital pressures, encourage domestic manufacturing, and strengthen India's export competitiveness," FIEO President SC Ralhan said.
He also said India's heavy dependence on foreign shipping lines exposes exporters to high freight costs, supply disruptions, and volatility in global shipping rates.
FIEO has proposed extending the 15 per cent concessional corporate tax rate for new domestic manufacturing units for at least another five years.
Apex apparel exporters' body AEPC has also sought fiscal incentives, including scrips and an increase in the interest subsidy rate for loans in the Budget, to help the sector tide over US tariff shocks.
AEPC Chairman A Sakthivel has suggested a reduction of GST rates on textile machinery and a new technology upgradation scheme for micro units.
He said the Indian apparel sector is currently facing an exceptionally challenging environment, with sharp tariff shocks in key markets, such as the US, coupled with prolonged geopolitical uncertainties that continue to disrupt global trade flows, logistics and demand sentiment.
The US has imposed a 50 per cent tariff on Indian goods entering American markets since August. The high levy has disrupted the country's exports to its largest export destination.
The Council for Leather Exports (CLE) has requested to reinstate basic customs duty exemption on the import of bovine crust (semi-finished leather derived from cattle hides) and finished leathers.
The council has also urged changes in the IGCR (Import of Goods at Concessional Rate of Duty) scheme.
Similarly, the sports goods industry has recommended a cut in import duty on willow (used to make bats) and cane.
Kolkata-based seafood exporter and MD of Megaa Moda, Yogesh Gupta said the Budget suggested a feed subsidy in the same line as fertiliser subsidy, rationalisation of RoDTEP (Remission of Duties and Taxes on Exported Products) rates and timely refund of taxes.
The FY27 Budget should look at measures like supporting MSMEs through export credit and concessional financing, as well as funding exploration of critical minerals to enhance trade resilience and reduce external vulnerabilities, Deloitte India has said.
Deloitte Economist Rumki Majumdar has said that rising global protectionism and ad-hoc measures (tariff hikes, rules-of-origin changes and non-tariff barriers) add uncertainty for Indian exporters.
Merchandise exports during April-December this fiscal year rose 2.44 per cent to USD 330.29 billion. Imports grew by 5.9 per cent to USD 578.61 billion, leaving a trade deficit of USD 248.32 billion during the nine-month period of 2025-26. PTI RR RR BAL
BAL
