Govt Sets up Committee to Examine Tax, Export Clearance Issues of Manufacturing Sector

The government has set up a committee to examine the tax and export clearance issues being faced by manufacturing units and suggest measures to further streamline the system amid high tariffs imposed by the US, an official has said.

The committee includes representatives from the finance ministry, Department for Promotion of Industry and Internal Trade (DPIIT), Department of Commerce, Directorate General of Foreign Trade (DGFT), and the RBI.

It also has special invitees from industry chambers, Federation of Indian Export Organisations, export promotion councils, and consultancy firms.

The official said the committee will examine the existing export-related tax structures (both customs duties and export incentives) and export clearance procedures to identify their impact on the manufacturing sectors' competitiveness and export performance, and suggest refinements or alternatives, if needed.

Besides, it would identify sector-specific challenges in high-potential export sectors, such as engineering, pharmaceuticals, electronics, chemicals, agro and processed food, textiles, leather, gems and jewellery.

It would also study and recommend global best practices in export taxation and customs facilitation, and propose actionable policy reforms to streamline processes.

The committee is expected to submit its report in two months.

Indian manufacturing sectors are facing issues because of the imposition of a steep 50% tariff on Indian goods entering America from August 27.

The high duty will make India's labour-intensive goods less competitive in the US market compared to those from Vietnam, Bangladesh, and Thailand, which face lower tariffs.

The US accounted for about 20% (USD 86.5 billion) of the country's total goods exports of USD 437 billion in 2024-25.