In the Union Budget 2025-2026, Finance Minister Nirmala Sitharaman announced several key tax revisions aimed at promoting manufacturing and supporting industries. These changes are expected to influence the prices of various goods across sectors, with some items seeing price reductions while others are likely to become more expensive.
Goods Expected to Become Cheaper:
– Electronics & Medicines: Price reductions are anticipated for electronics and medicines due to lowered customs duties on critical components. The Finance Ministry has waived the basic customs duty on 36 types of medicines used for cancer and long-term diseases. Additionally, the customs duty on open cells and other components used in electronics manufacturing has been reduced to 5%.
– Electric Vehicles (EVs) and Mobile Phones: Customs duties have been removed for 35 raw materials used in EV batteries and 28 components for mobile phone batteries. This is expected to drive down prices of electric vehicles and mobile phones.
– Footwear: The customs duty exemption on wet blue leather will likely lead to a decrease in the prices of leather footwear, belts, and jackets.
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– Frozen Fish & Building Materials: A reduction in customs duties from 30% to 5% on frozen fish will make them more affordable. Moreover, the tax on building materials such as travertine and raw granite has been reduced from 40% to 20%.
– Food Products & Beverages: The customs duty on synthetic flavoring agents used in food products and cold beverages has been decreased from 100% to 20%, potentially reducing food prices.
– Imported Vehicles: A significant reduction in customs duties on imported cars, motorcycles, vans, and buses is expected to lower the cost of these vehicles.
– Luxury Goods: There has been a decrease in customs duties on electronic toy parts, jewelry, and goldsmith products.
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Goods Expected to Become More Expensive:
– Television Sets: TV prices are expected to rise due to an increase in customs duties on interactive flat panel displays, which will now attract a tax rate of 20% (up from 10%).
– Clothing: The increase in customs duty on embroidered fabrics from 10% to 20% will lead to higher prices for textiles and garments.
– Imported Products: Customs duties on imported candles, luxury yachts, PVC products, and shoes have been raised, which is likely to make these items more expensive.
– Smart Meters & Solar Batteries: The hike in customs duties on smart meters and solar batteries will result in price increases for these products.
These changes are part of the government’s broader strategy to boost domestic production in certain sectors while making adjustments to the cost structure in others. The impact on prices will be felt across a range of consumer goods and industrial products.