Indian govt forms committee to review tax & export clearance for manufacturers, aiming to boost competitiveness after US imposes 50% tariffs. Report due in 2 months.
Inter-Ministerial Panel to Review Tax Framework, Identify Sector-Specific Hurdles, and Submit Report in 2 Months
New Delhi, India – In a swift response to counter the impact of steep new US tariffs the Indian government has constituted a high-level committee to review tax and export clearance challenges faced by manufacturing units and recommend measures to simplify the system. The move aims to enhance the competitiveness of Indian exports in the global market which now faces a significant barrier with the United States imposing an effective 50% tariff on Indian goods.
The committee’s formation, reported by PTI is a direct strategic measure to insulate and bolster India’s export economy following the recent trade actions from Washington.
Committee Composition: A Whole-of-Government Approach
The panel embodies a collaborative, inter-ministerial effort, featuring members from:
- Ministry of Finance
- Department for Promotion of Industry and Internal Trade (DPIIT)
- Department of Commerce
- Directorate General of Foreign Trade (DGFT)
- Reserve Bank of India (RBI)
Additionally, representatives from industry chambers, the Federation of Indian Export Organisations (FIEO), export promotion councils, and consultancy firms will participate as special invitees, ensuring that ground-level challenges are heard.
Mandate: A Comprehensive Review to Boost Competitiveness
The committee has been tasked with a broad and critical mandate:
- Examine Export-Linked Tax Framework: Assess the current tax structure’s impact on the competitiveness and export performance of manufacturers and suggest modifications or alternatives.
- Identify Sector-Specific Hurdles: Pinpoint bottlenecks in high-potential export sectors, including:
- Engineering
- Pharmaceuticals
- Electronics
- Chemicals
- Agro and Processed Food
- Textiles, Leather, Gems & Jewellery
- Study Global Best Practices: Analyze international models for export taxation and customs facilitation to recommend actionable reforms for making Indian processes more efficient.
The committee is expected to submit its detailed report with recommendations within two months.
The Trigger: US Tariffs and the Need for Agile Policy
This development is a direct consequence of recent US trade policies. On August 6, 2025, US President Donald Trump signed an executive order imposing an additional 25% duty on Indian imports, taking the overall tariff rate to 50%. The order, which came into effect on August 27, cited India’s continued oil imports from Russia as the primary concern. A day earlier, the first 25% tariff was announced alongside an unspecified ‘penalty’ linked to New Delhi’s purchases of Russian energy and arms.
Strategic Importance
This committee represents a proactive and necessary step to:
- Improve Ease of Doing Business: Streamlining export clearances and tax structures can reduce delays and costs for manufacturers.
- Enhance Global Competitiveness: By addressing internal inefficiencies, Indian exports can remain attractive in other international markets despite US tariffs.
- Provide Sector-Specific Support: Targeted recommendations for key sectors can help them navigate the new trade landscape effectively.
This move signals the government’s commitment to agile policymaking and its support for the manufacturing sector during a period of significant global trade volatility.
