Mumbai: India is negotiating trade agreements with developed countries such as the United States, United Kingdom (UK) and European Union, any deficiency in tariffs may affect the country’s customs revenue in the next financial year due to any deficiency in tariffs. In the budget of FY 2025-26, revenue collection through customs is expected to increase to Rs 2.40 trillion.
Due to free trade agreements with countries like Japan, South Korea and South East Asian Nations, India has lost Rs 94,172 crore in total revenue through customs in the current financial year.
After the tariff war launched by Donald Trump, India and the US are preparing to sign a bilateral trade agreement, which is expected to be completed in the next seven to eight months.
In the current financial year, India has lost the highest revenue of Rs 37,875 crore through customs duty in agreements with Asian countries. Government sources said that the agreement with Japan has caused a loss of Rs 12000 crore, while the agreement with South Korea caused a loss of Rs 10335 crore.
In the Free Trade Agreement with any country, both countries have to compromise their customs revenue. Only in such a situation, the goods of that country can reach other markets. India usually does not consider customs duty to be the main source of its revenue. The data also shows that India lost Rs 4,840 crore in the financial year 2025 due to the cost of gold on gold in agreement with UAE.
While the US has adopted a policy of counter -tariffs, India is likely to reduce fees on many American goods, which is likely to affect its revenue more.
Sources also stated that the objective behind imposing customs duty is not to earn revenue, but to protect domestic industries from competition from foreign goods.
