While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Shri Arun Jaitley said that customs and excise duty structure plays an important role in incentivizing domestic value addition towards Make in India campaign. He proposed to make suitable changes in customs and excise duty rates on certain inputs, raw materials, intermediaries and components and certain other goods and simplify procedures so as to reduce costs and improve competitiveness of domestic industry in sectors like Information Technology hardware, capital goods, defense production, textiles, mineral fuels & mineral oils, chemicals and petrochemicals, paper, paperboard & newsprint, Maintenance repair and overhauling of aircrafts and ship repair, etc.

Customs and excise duty reform to incentivise domestic value addition and lower costs for targeted manufacturing sectors. Adjustment of customs and excise duties is proposed to incentivise domestic value addition by altering tax rates and simplifying procedures for inputs, raw materials, intermediaries and components to reduce costs and improve competitiveness. The proposal targets priority sectors including IT hardware, capital goods, defence production, textiles, mineral fuels and oils, chemicals and petrochemicals, paper and newsprint, and aircraft and ship repair through tariff and procedural changes to encourage domestic manufacturing value chains.